Diamcor launches C$5m financing

VANCOUVER (miningweekly.com) – South Africa-focused diamond project developer Diamcor has launched a C$5-million brokered private placement.

Proceeds from the offering will be used for the acquisition of additional operational equipment and materials to support the continued advancement of the company's Krone-Endora at Venetia project, in South Africa’s Limpopo province, and for general and administrative purposes.

The Kelowna, British Columbia-based company has appointed Echelon Wealth Partners as the sole agent to lead the offering of up to 4.54-million units at a price of C$1.10 each.

The units will each comprise one common share and one-half of a common share purchase warrant. Each whole warrant will entitle the holder to buy another share at a strike price of C$1.60 for a period of 36 months from the date of issuance.

Echelon will receive a cash fee of 6% of the proceeds raised from the offering and common share purchase warrants equal to 6% of the number of units sold by Echelon under the offering.

The offering is subject to stock exchange approval and completing definitive documentation.

Diamcor reported revenues of $1.9-million for the fiscal first quarter ended June 30, having sold 13 384.72 ct of diamonds during the period.

The Krone-Endora at Venetia mine is located next to De Beers’ Venetia diamond mine – South Africa's largest diamond mine.

Despite having started selling diamonds from the project at the end of 2012, Diamcor has not yet declared commercial production at Krone-Endora at Venetia and recoveries are incidental to the ongoing commissioning and testing exercises performed at the project.