DiamondCorp resumes Lace operations

Johannesburg - DiamondCorp said on Tuesday that operations have resumed at its Lace diamond mine in the Free State following a Section 54 shutdown notice on underground operations by the Department of Mineral Resources (DMR).

“DiamondCorp is pleased to advise that the Section 54 underground shutdown instruction issued last week by the South African Department of Mineral Resources with respect to the Lace diamond mine has been lifted and mining has resumed,” the mine said.

File picture: Harpreet Padam. Credit: FREE IMAGES

“The financial impact of the four days of mining lost as a result of the shutdown instruction has been minimised by a rescheduling of programme maintenance and the fact that the mine was ahead of its planned tonnage for the month at the time of the shutdown.”

The shutdown notice was related to a fire on a dump truck extinguished without injury - just inside the portal to the decline at the mine operated by DiamondCorp, which also holds 74 percent of the ownership.

The instructions issued by the DMR included a request for an “external ventilation audit team to inspect the mine for smoke and other gases”.

Suspension of mining had dealt a blow to the diamond miner as it continues to struggle with raising capital.

The company announced last week that it required additional funding in the very near term of £500 000 for immediate financial commitments in order to continue trading as a going concern, in addition to its longer term financial requirements.

The diamond miner said it was in discussions with a third party for the provision of a convertible debt facility to satisfy this requirement, but no assurances could be given that the provision of such finance would be entered into either in time or at all.

But on Tuesday, DiamondCorp said its board of directors was of the view that the company should, in parallel to its discussions to secure additional funding, conduct a wider strategic review to explore additional opportunities.

It said this should include a corporate transaction such as a merger with, or offer for the group by a third party or a sale of the group’s businesses.

As such, the Panel on Takeovers and Mergers has granted a dispensation in relation to a merger with a third party or a sale of the company will take place within the framework of a “formal sale process”, saying that the board intended to pursue any such possible alternatives to ensure the best outcome for its shareholders.