DiamondCorp appoints new chair to oversee Lace sale

JOHANNESBURG (miningweekly.com) – Embattled diamond developer DiamondCorp on Monday confirmed that Chris Ellis has joined its board as nonexecutive chairperson, with immediate effect.

Ellis’s appointment would be on an interim basis, with his key responsibility being overseeing the formal sales process of DiamondCorp's Free Sate-based Lace mine.

He succeeded Euan Worthington who resigned.

The company earlier this month entered into a £700 000 Shariah-compliant secured convertible financing facility with independent investment management firm Rasmala.

This comes after DiamondCorp warned, on October 12, that it urgently needed to secure £500 000 in funding to remain a going concern. It also reported that there had been another delay in the ramp-up to full commercial mining production at the Lace mine, with the 30 000 t/m output target expected to be achieved only in February 2017. Its shares fell by as much as 50% and 40% on the JSE and LSE respectively.

A day later, it reported that the Lace mine had been halted under a Section 54 notice following a fire incident on a dump truck just inside the portal to the decline at the mine, resulting in a further decrease in its share price on the JSE and LSE.

The adverse share price movements prompted a third party, which DiamondCorp was in negotiations with for a £500 000 convertible debt facility, to withdraw from the discussions.

Following this, DiamondCorp announced on October 18 that it would consider a merger or sale of the Lace mine.

Under the agreement with Rasmala, the £700 000 would be drawn down in two tranches.

Meanwhile, DiamondCorp on Thursday said it had also appointed Rasmala CFO Neil McDougall nonexecutive director, with immediate effect.

His appointment was pursuant to the terms of the financing facility with Rasmala and in addition to the continued role of Michael Toxvaerd as nonexecutive director of both DiamondCorp and Rasmala.

Prior to joining Rasmala, McDougall served in senior finance roles in various organisations including Europe Arab Bank, Commerzbank and Standard Chartered.

In his previous roles, he was responsible for all aspects of global finance support, from performance management and decision-making through to product control, valuations control and financial and regulatory reporting.

DiamondCorp nonexecutive director Hulme Scholes also resigned from the board, effective immediately, but would remain a director of DiamondCorp’s operating subsidiary Lace Diamond Mines.