Diamcor Mining (DMI-V) first tranche of the $3.5-million convertible loan financing that the company began late last month. The unsecured notes have a two-year term, pay interest at 10 per cent annually and convert into stock at seven cents per share. Indeed, a conversion is likely what will happen, as Diamcor's current accounts were nearly $9-million in the red at the end of June. A second and final tranche is expected soon, one in which the holders of $1.6-million of Diamcor's term-loan debt have subscribed for the new notes.
Mr. Taylor, president and chief executive officer, says that the cash will allow Diamcor to resume its never-ending -- but currently COVID-19 paused -- trial mining program at the Krone-Endora at Venetia mine in South Africa. The mine was ordered closed when South Africa entered a national lockdown in late March. That three-week directive had been extended several times, but an easing of restrictions that began with October allows Diamcor to get back to work. Of course, to do so, Mr. Taylor and his crew will need the working capital provided by its new debt arrangement.
The trial mining is presumably ahead of a production decision at Krone-Endora, but Mr. Taylor had best hurry up and decide, lest Diamcor mine the entire deposit as a test. Since the dig began in 2013, Diamcor has mined and sold about 160,000 carats for roughly $26-million, averaging about $165 (U.S.) per carat for what covers about one-eighth of the current resource.
Of course, Mr. Taylor and his crew are optimistic that many more diamonds are present -- although how many more, they are not sure. Some washed away -- alluvial gems -- and some slid away -- eluvial stones -- from the big Venetia kimberlite that De Beers has been mining for many years. Indeed, De Beers believed that up to one vertical kilometre of what had originally been its Venetia pipe had shifted or eroded from the top of the pipe, but how much of it ended up on Krone-Endora remains anybody's guess.
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