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Delgatto to Finance BlueRock’s Diamonds

Arrangement will grant the miner liquidity until rough prices recover.
May 13, 2020 10:06 AM   By Rapaport News
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RAPAPORT... Delgatto Diamond Finance Fund (DDFF) will provide presale financing for rough from BlueRock Diamonds’ Kareevlei mine in South Africa to help boost liquidity until diamond prices recover.

BlueRock will sell its monthly parcel of diamonds to DDFF at 70% of a stipulated value agreed by both parties, and pay 1.25% interest per month, BlueRock said Wednesday. The miner will then have the option to repurchase the diamonds at the same price for up to a year. If BlueRock fails to repurchase the diamonds within that time frame, DDFF will take ownership, unless both agree to extend the terms of the arrangement, the miner noted.

The financing will enable BlueRock greater flexibility over when it holds sales, and allow it to wait until market prices bounce back from the COVID-19 crisis, it added.

The company will also begin selling its rough in Antwerp through a partnership with diamond-brokerage firm Bonas Group, which will market the stones as Kareevlei Diamonds. BlueRock believes the diamond market in Belgium will recover faster than in South Africa, it said. The company expects to export its first consignment of diamonds to Bonas at the end of June.

“We have put important building blocks in place in an effort to de-risk the short- to mid-term volatility in the market,” said BlueRock executive chairman Mike Houston. “Our focus remains on the preservation of cash as we work our way through what is a very difficult and uncertain time.”

Image: A rough diamond and tweezers. (BlueRock Diamonds)
Tags: BlueRock, BlueRock Diamonds, Bonas, Bonas Group, DDFF, Delgatto, Delgatto Diamond Finance Fund, Kareevlei Diamonds, Kareevlei mine, Mike Houston, Rapaport News
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