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Paragon Diamonds Secures $12M in Funding
Feb 1, 2015 4:45 AM
By Ronen Shnidman
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RAPAPORT... Paragon Diamonds Limited, a diamond exploration company, has signed a binding memorandum of understanding to receive $12 million in debt and equity financing from International Triangle General Trading LLC (ITGT).
Under the agreement, ITGT will subscribe to 98 million new ordinary shares of Paragon at a price 8.3 cents (5.5 pence) per share, raising $8.09 million in capital for the miner.
Paragon and its subsidiary, Meso Diamonds, will also guarantee a $4 million three-year secured loan note carrying a 10 percent interest rate. The loan will be considered senior debt, secured in part by the plant and the machinery at the Lemphane mine in Lesotho.
ITGT also stated its intention to increase its stake in Paragon by buying existing shares held by current major shareholders. The company said it intends to purchase 9.09 million ordinary shares from current stakeholder Titanium Capital. Paragon stakeholders Obtala Resources Limited and Grandinex International Corp. have also committed to sell ITGT a combined 40 million shares. Both share purchases will be executed at a price of 8.3 cents (5.5 pence) per share.
The investment, once concluded, is expected to help Paragon push its Lemphane mine concession into the first stage of production during the second quarter of 2015. The miner expects to extract 1 million tonnes of diamond-bearing ore during the initial stage production, anticipated to last two years.
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Tags:
ITGT, Lemphane, Lesotho, Maduca, Paragon Diamonds, Ronen Shnidman
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