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2 minute read
29 Nov 2016
12:00 pm

DiamondCorp reopens Lace Mine open pit, starts negotiations with creditors


DiamondCorp needs to raise capital and settle debt in order to satisfy the company’s immediate requirements.

Photo: courtesy of DiamondCorp.

DiamondCorp on Tuesday said the 310-metre production level at its operating subsidiary, Lace Diamond Mines in the Free State, was clear of the floodwater and that the mine’s pumping system was now working on a normal basis.

This comes after DiamondCorp suspended all production activity at its Lace Mine in the Free State two weeks ago after heavy rains flooded the open-pit mine.

Two thunderstorms passed over the Lace Mine, dropping almost 90mm of rain in just over an hour on a Friday afternoon. The rain equated to almost one-third of the mine’s annual rainfall.

In total, DiamondCorp said more than 10 000 cubic metres of water was estimated to have entered the mine through the open pit and access ramp.

“The longhole drill rig has been moved to higher ground within the mine and is awaiting remediation of the access ramp before being brought to surface for dispatch to Sandvik for rebuild,” DiamondCorp said in a statement.

“Options and timelines for ramp repair are being assessed by Lace Diamond Mine management.”

DiamondCorp said Lace Diamond Mine was in the process of claiming against its insurance policy in respect of the storm damage and remediation.

The miner said 5 130 carats of diamonds recovered prior to the mine closure were currently being tendered for sale in Johannesburg.

Meanwhile, DiamondCorp said the business rescue practitioner and the management of Lace Diamond Mine were engaged in discussions with all stakeholders in accordance with the provisions of Section 129 of the South African Companies Act.

DiamondCorp needs to raise capital and settle debt in order to satisfy the company’s immediate requirements to continue trading as a going concern.

Last week, DiamondCorp appointed Daniel Terblanche of Deloitte and Touche as the business rescue practitioner at Lace Diamond Mines after the Companies and Intellectual Property Commission accepted the application to put the mine under business rescue following a resolution by the board.

DiamondCorp said stakeholders included trade creditors, the Industrial Development Corporation as the primary lender; bond holders; Laurelton Diamonds Inc; the mine’s workforce including the Association of Mineworkers and Construction Union; and Soapstone Investment Ltd and DiamondCorp plc, being themselves the largest creditors to Lace Diamond Mine.

“Management, alongside PwC, continue to evaluate the group’s financial projections with a view to determining the resultant additional capital requirement that is anticipated to be required in the event of a successful conclusion of the business rescue proceedings,” DiamondCorp said.

The company’s shares remain suspended on both the London and Johannesburg Stock Exchanges.