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» JSE:BRC DIAMONDCORE LIMITED:
400c 0%

BRC DiamondCore hits the doldrums
Brendan Ryan
Posted: Tue, 14 Oct 2008

[miningmx.com] -- BRC DiamondCore (BRC) shares slumped 42% on the JSE this morning, falling to 225c which is 94% down on the 12-month high of R36.

The share has been sliding since Diamond Core Resources merged with BRC Diamonds and listed as BRC DiamondCore on the Toronto and Johannesburg stock exchanges in February this year.

BRC vice-president of finance, Brian Scallan, said he was not aware of any reason for the drop in the share price.

The company is trying to raise C$3m at an offer price of C$1 a share, and has engaged Toronto firm Kingsdale Capital to do so through a private placing of up to 3m shares.

The offer was announced in late August when BRC was trading on the TSX at a then-historic low of C$0.70. The share last traded on the TSX at C$0.55 on October 8.

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At the time Scallan said: “Kingsdale tested the market before accepting this task. The BRC price has been driven down on low trading volumes. Investors would not be able to pick up this volume of shares on the market without paying well above C$1 a share.”

Asked about progress on the capital raising since then, Scallan said: “Clearly the situation is problematic given current market conditions, but we are making progress.”

BRC is also awaiting the outcome of the legal dispute with its former black economic partner Sefalana which was heard in the Witwatersrand High Court late in September. Judgment was reserved.

Scallan said: “We are now dependent on when the judge will make his decision which, apparently, could take up to two years.”

Sefalana chairman Gordon Young said: “The matter has been heard and the judge has reserved judgment. Now we wait and I cannot comment until that judgment is delivered.”