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DiamondCorp Signs $7M Royalty Deal for Lace Mine
Mar 18, 2015 6:06 AM
By Deena Taylor
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RAPAPORT... DiamondCorp signed a $7 million royalty financing deal for its Lace diamond mine in South Africa. The company will use the proceeds of this transaction to launch operations at Lace in the second half of 2015.
Under the terms of the deal, Acrux Resources (Pty) Limited will advance the money, interest free, in return for a 3 percent net revenue royalty on the first 12 million carats of diamonds recovered from Lace after diamond marketing costs are deducted. After eight years, DiamondCorp's 74 percent owned subsidiary, Lace Diamond Mines (LDM), will have the right to repurchase the royalty from Acrux.
"'The Royalty with Acrux will provide significant cash at the operating company level without the dilution of a large equity issue or additional debt at a time when we consider DiamondCorp shares to be trading at a significant discount to the underlying value of the Lace mine," said Paul Loudon, the CEO of DiamondCorp.
Acrux Resources is a Johannesburg-based, resource-focused investment management company and joint venture manager of the recently established alternative mining finance fund, Ata Resources Fund 1.
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Tags:
Deena Taylor, DiamondCorp, diamonds, Lace Mine
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