[miningmx.com] — Diamond mining company Petra Diamonds, the AIM-listed diamond producer with operations in South Africa, on Wednesday said it has secured new debt facilities of about $78m from the International Finance Corporation (IFC), the lending arm of the World Bank, and from Rand Merchant Bank (RMB).
The company said that together with contributions from its own treasury, the facilities would primarily finance the expansions of the Williamson mine in Tanzania and the Cullinan mine in South Africa.
In addition, the facilities will be applied to general group working capital needs and, immediately after completion, settlement of the outstanding $31m loan due to Al Rajhi Holdings, thereby removing this short-term debt obligation from Petra’s balance sheet.
The agreements provide Petra with a $40m loan from IFC and a $38.7m, about R300m, loan from RMB as well as the extension of the company’s existing $12.9m (about R100m) RMB group overdraft facility.
Petra said each of the loan facilities is interdependent and completion of the agreements, which would enable Petra to draw down on the facilities, is conditional upon, among other things, certain conditions precedent being satisfied.
The principal conditions precedent relate to the perfection of security over the group’s assets and approval from the Tanzanian Government and the South African Reserve Bank.
Petra expects to have met all of the conditions precedent before the end of October.
“Completion of this financing will be an important step in enabling the company to deliver on its core objectives of doubling production by 2014 and trebling it by 2019,” said Petra CEO Johan Dippenaar.
Posting its annual results last week, Petra reported production of 1.16 million carats in the year to end June 2010 – a 6% improvement on the previous year’s production of 1.1 million carats.
