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DiamondCorp looks for growth
Sandile Mchunu
Posted: Mon, 31 Mar 2008
[miningmx.com] -- DiamondCorp could accelerate production from its Lace mine in South Africa and pay shareholders a dividend if it does not find any assets that make financial sense to buy, CEO Paul Loudon said.
AIM-traded DiamondCorp listed on the JSE on Monday. The company is looking for growth in addition to the diamonds it is retrieving from a dump retreatment programme and a future underground mine at the Lace project near the De Beers’ Voorspoed mine.
“We have been looking hard for the past six months but haven’t found anything yet. Nothing meets our criteria as we seek to benchmark new acquisitions against Lace. We don’t want to acquire for the sake of acquiring,” said Loudon.
“We will be happy to accelerate the development of Lace if acquisitions are not possible. That will also mean that we will pay more dividends to our shareholders.”
DiamondCorp needs R100m to develop an underground mine, add a crusher and put in power infrastructure at Lace. It will fund the project in two tranches of R50m each, with the second tranche largely funded internally as well as R13m from each of its two empowerment shareholders.
In the year to end-December 2007, DiamondCorp commissioned a 1.6 million tonnes per annum dense media separation plant and has been
treating tailings since the start of October. Power outages and wet summer weather disrupted operations. It treated 320,000 tonnes of tailings and recovered 25,266 carats, with the two largest stones being 17.7 carats and 13.8 carats.
DiamondCorp, was formed in 2005 to acquire and develop diamond assets in Southern Africa. The company has approximately 70% of its shares held by the public.
DiamondCorp listed on London’s Alternative Investment Market (AIM) in February 2007.
“It is important to list on the JSE because it gives us an opportunity to improve liquidity… it provides the company with an opportunity to raise capital in South Africa,” said Loudon.
DiamondCorp owns 74% of Lace mine in Kroonstad in the Free State province. The other 26% is in the hands of the BEE partners with Shanduka and Sphere Investments each owning 13%.
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