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BlueRock Reaches Financing Deal with Investor

Jul 6, 2022 6:40 AM   By Rapaport News
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 BlueRock Diamonds’ stock price dropped 29% after it signed a financing deal that could dilute current shareholders’ interest in the company.

The miner, which runs the Kareevlei deposit in South Africa, made a deal with Teichmann Company that will potentially increase the investor’s stock from 17.4% to 51%, BlueRock said Tuesday.

The company will initially issue a GBP 1 million ($1.2 million) simple loan note to Teichmann alongside the provision of a debt funding facility of up to ZAR 30 million ($1.8 million) for Kareevlei, it noted.

“The need for financing has arisen as a result of the excessive and extended rainy season this year, which has delayed the ramp-up of production and the development of our main pit, leading to significantly lower production levels and lower grades than expected,” said BlueRock CEO Mike Houston.

The company had been exploring various funding options after running out of money to continue to operate the site, it said. BlueRock had already invested “heavily” in expanding the deposit, and it was left in a challenging situation when the weather significantly impacted revenue.

“Having explored these options, the only source of funds the form and magnitude required was that offered by Teichmann, albeit on terms that dilute existing shareholders significantly,” Houston added.

Image: Rough diamonds from BlueRock’s Kareevlei mine. (BlueRock Diamonds)
Tags: BlueRock, BlueRock Diamonds, diamonds, Kareevlei deposit, Mike Houston, Rapaport News, Rough Diamonds, South Africa, Teichmann Company
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