[miningmx.com] — DIAMONDCORP subsidiary Lace Diamond Mines has entered into a R280m loan term sheet agreement with the Industrial Development Corporation (IDC), the company announced on Monday.
The loan would be used for the underground development of Lace mine and the purchase of mining equipment, and would likely carry a term of seven years.
Said Paul Loudon, CEO of DiamondCorp: “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.
“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% of the estimated capital required to establish a block cave development on the 47 level at the Lace mine.”
Management`s latest estimate for the total cost of development at Lace is R384m, but with revenue expected from diamond sales after 18 months, the peak funding requirement is forecast to be R280m.
The loan would be secured over the assets of Lace.
DiamondCorp anticipates that a final agreement would be finalised by the end of July.
