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DiamondCorp Agrees to Loan Deal

Feb 28, 2017 9:11 AM   By Rapaport News
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RAPAPORT... DiamondCorp has reached an agreement with one of its lenders, enabling the embattled company to secure a loan against its Lace mine in South Africa as part of its business recovery efforts.

Last month, the company attempted a sale of shares to fund the care and maintenance of the Lace mine, where operations were suspended after severe flooding in November. However, it has not completed that venture, since the sale’s conditions have not yet been met.

Under the new deal, which the miner announced on Tuesday, DiamondCorp will be able to receive a loan from the Industrial Development Corporation of South Africa, either in addition to or instead of the sale of shares.

Any amounts borrowed by Lace Diamond Mines, a wholly owned subsidiary of DiamondCorp, will be subject to 13.5-percent annual interest, the miner said in its statement.

The loan agreement is conditional on DiamondCorp agreeing to terms with the Association of Mining & Construction Union. However, such an agreement may not be reached in time, and the required financing may not materialize fast enough for the company’s business-rescue process to continue, DiamondCorp warned. In that event, DiamondCorp would likely go into administration, it said.
Tags: Association of Mining & Construction Union, DiamondCorp, finance, Industrial Development Corporation of South Africa, Lace, Lace Diamond Mines, Lace Mine, mines, mining, Rapaport News, South Africa
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