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DiamondCorp Agrees to Loan Deal
Feb 28, 2017 9:11 AM
By Rapaport News
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RAPAPORT... DiamondCorp has reached an agreement with one of its lenders,
enabling the embattled company to secure a loan against its Lace mine in South
Africa as part of its business recovery efforts.
Last month, the company attempted a sale of shares to fund
the care and maintenance of the Lace mine, where operations were suspended
after severe flooding in November. However, it has not completed that venture, since
the sale’s conditions have not yet been met.
Under the new deal, which the miner announced on Tuesday, DiamondCorp
will be able to receive a loan from the Industrial Development Corporation of
South Africa, either in addition to or instead of the sale of shares.
Any amounts borrowed by Lace Diamond Mines, a wholly owned
subsidiary of DiamondCorp, will be subject to 13.5-percent annual interest, the
miner said in its statement.
The loan agreement is conditional on DiamondCorp agreeing to
terms with the Association of Mining & Construction Union. However, such an
agreement may not be reached in time, and the required financing may not
materialize fast enough for the company’s business-rescue process to continue,
DiamondCorp warned. In that event, DiamondCorp would likely go into administration,
it said.
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Tags:
Association of Mining & Construction Union, DiamondCorp, finance, Industrial Development Corporation of South Africa, Lace, Lace Diamond Mines, Lace Mine, mines, mining, Rapaport News, South Africa
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