|
|
Botswana: Mining in Lerala to Start in May
 |
 |
|||||||||
|
||||||||||
|
|
|||||||||
|
||||||||||
Mmegi/The Reporter (Gaborone)
20 March 2008
Posted to the web 24 March 2008
Wanetsha Mosinyi
Despite construction delays, Diamonex's Lerala Diamond Mine is now due to be commissioned in May, the Board of Directors of the company have said.
But if further delays occur in the commencement of production from the Lerala Diamond Mine, revenue flows to the group will be deferred, said Managing Director Dan O'Neill. Commenting on the financial report of the consolidated group for the half-year ended 31 December 2007, O'Neill said the group's ability to continue with these planned exploration activities and mining is dependent on having finance available.
"If sufficient mine revenues are not generated from Lerala by July 2008, cash forecasts indicate (that) an additional $2 million working capital will be required to continue with planned activities."
He said the current cash forecasts show an adequate working capital position. Historically, the group has financed these activities by equity and debt.
The Directors are reviewing mine scheduling, exploration activity and corporate expenditures with a view to expediting mine commissioning, reducing costs and monitoring any need to obtain future funding from either debt or equity sources. The Directors, which include former cabinet minister David Magang, said they are confident these initiatives will be successful, and no commitment has yet been made as to the requirement to source any additional funding.
The consolidated group's operating loss for the half-year, after income tax was $2,5 million (2006: $794,270). Exploration and evaluation expenditure during the half-year totalled $889,468 and mine development expenditure totalled $11,665,600 for the period. Activity during the half-year was focused primarily on the development of the Lerala Diamond Mine, the report said.
In the last quarter of 2007, DiamonEx Limited was listed on the London Alternative Investment Market (AIM) of the London Stock Exchange. The directors believe that the London AIM listing will improve share-trading access for international institutional investors that appreciate investment opportunities presented by diamond producers in African countries, and Botswana, in particular.
During the period, 32,348,212 new shares were issued raising $9,866,248. In addition, 2,000,433 options were issued to advisors to the group for their assistance in raising the additional equity and achieving the AIM listing. Last September, DiamonEx issued BWP 50 million unsecured fixed rate convertible capital notes.
|
The notes mature in August 2011. During October 2007, the Diamonex (Botswana) Limited signed a funding agreement with the European Investment Bank for Euro 5 million. This loan is to be secured by mortgage over surface rights and mineral rights of the Lerala Diamond Project, as well as a pledge of the shares of Diamonex (Botswana) Limited and a parent company guarantee. It is for a period of up to 8 years. On 17 January 2008, the entity issued 8,457,000 shares at 37 cents each to raise $3,129,090 additional equity by means of a placement through Fox-Davies Capital Limited. The Directors said the financial report has been prepared on a going concern basis that contemplates the continuity of normal operating activities and the realisation of assets and settlement of liabilities in the normal course of business.
| |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Copyright © 2008 Mmegi/The Reporter. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Make allAfrica.com your home page | RSS Feed | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Top | Site Guide | Who We Are | Advertising | Search | Subscribe | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Questions or Comments? Contact us. Read our Privacy Statement. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
