The International Resource Journal: IDC backs DiamondCorp's Lace Mine with $33.6M loan 

IDC backs DiamondCorp's Lace Mine with $33.6M loan
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Anna Reitman on 20 May, 2012 08:53:00
 
IRJ - May 21 - DiamondCorp has signed a term sheet with South African
state-backed Industrial Development Corporation (IDC) for a $33.6 million loan
to develop the Lace Mine in Free State province.
The company anticipates that the loan financing agreement, which is for seven
years at a borrowing cost of 11 per cent, will be in place by the end of July
2012.
“The mine plan shows a deeper level of mining and longer development time
– this is positively offset by block cave economics with longer block cave
life and higher grades providing for better project cash flows,” said
broker Fairfax, adding that the technical mining and processing plant have been
subject to in-depth review by SRK Consulting.
Maiden run of mine production is expected at around 8 thousand carats (kcts)
supplemented by tailings reprocessing that is expected to produce around 15kcts
in 2012 and 30kcts in 2013. Lace will reach full production by mid-2014
producing 300kcts from both tailing and run of mine production, according to
Northland Capital Partners.
DiamondCorp owns 74 per cent of the Lace diamond mine with the remaining 26 per
cent held by the company's Black Economic Empowerment (BEE) partners.
DiamondCorp CEO, Paul Loudon said: "The key driver for management in seeking
funding for the Lace mine development has been to find the optimum financing
method which is the least dilutive for shareholders of the company. Therefore,
we are delighted that we and our [BEE] partners have been able to agree in
principle a debt financing proposal from the IDC to provide over 98 per cent of
the estimated capital required to establish a block cave development on the 47
level at the Lace mine. This is a significant milestone in DiamondCorp's
transition from developer to producer and we welcome the support of the IDC in
funding this potentially long-life diamond mine in the Free State Province."