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Kimberley Diamonds Postpones Commissioning New Mines
Apr 16, 2014 8:00 AM
By Deena Taylor
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RAPAPORT... The board of directors for Kimberley Diamonds Limited said it will postpone plans to expand its production beyond the Ellendale mine after deferring plans to raise capital from a share placement due to prevailing market conditions.
The Ellendale mine in Australia produces 50 percent of the world’s fancy yellow diamonds. Kimberley's board noted that the company's cash balance stands at $9.1 million (AUD 9.7 million) with no debt and the company is fully funded for its existing operations. The board said that the current cash reserves and future operating cash flow from its Ellendale 9 pipe will also be sufficient to fund capital expenditure required to re-start the Ellendale 4 mine. Operations at Ellendale 4 are set to commence in October 2014 as scheduled. The company confirmed that mining at the Ellendale 9 pipe recommenced, following end of the wet season.
In a statement, the board noted that it is conscious of unnecessarily diluting its loyal existing shareholder base, given the pricing levels currently available. In addition, during the course of marketing the company, alternate, non-dilutive options to fund Kimberley's development program were proposed, which the board also wishes to consider.
Meanwhile, the company will postpone recommissioning its recently acquired Lerala mine in Botswana and commencement of mining operations at Argyle Smoke Creek. The company said it will wait until appropriate funding is available from operating cash flow or external sources to progress with these projects.
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Tags:
Deena Taylor, diamonds, Ellendale, Kimberley Diamonds, Lerala
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