Shares of diamond mining company Diamcor Mining fell 15% on the Frankfurt Stock Exchange. In Canada, its shares dropped 10% on Thursday. This came as the company announced that the TSX Venture Exchange had approved a private placement of CAD2 million (about $1.47 million).
Details
Diamcor shares opened on Friday, July 5, with a drop of more than 15% on the Frankfurt exchange, with the current price at EUR0.14. On Thursday, July 4, the shares retreated 10% to CAD0.045 in Canada.
The company reported that Canada’s TSX Venture Exchange had approved its private placement of CAD2 million (about $1.47 million). Insiders, management, and existing major shareholders subscribed to purchase shares worth CAD1.38 million (about $1 million). The exchange’s approval was required since NM Management Ltd, which owned about 20% of Diamcor before the additional issue (now diluted to approximately 18.87%), participated in the placement, the issuer explained. The exchange’s policy mandates approval of such deals to protect minority shareholders.
Context
Diamcor announced the private placement back on May 1, aiming to raise up to CAD1.5 million (about $1.09 million). The deal was expected to close on May 15, with the proceeds to be used for further development of the Krone-Endora project in South Africa. This site is adjacent to the Venetia mine, owned by diamond giant De Beers.
With the private placement, Diamcor intended to avoid tapping a convertible loan of up to CAD2 million (about $1.46 million), the company stated previously. However, due to high interest from investors, the deal was delayed, and the offering was increased to CAD2.5 million. The first tranche closed in early June, and the second now in early July.
About Diamcor
Diamcor mines and supplies rough diamonds to industry players and luxury retailers. It has a long-term contract with the Canadian subsidiary of Tiffany & Co (owned by LVMH) to purchase 100% of the rough diamonds from the Krone-Endora mine in South Africa. This site is currently Diamcor’s main focus, with plans for acquiring and developing other sites. The Canadian subsidiary of Tiffany & Co., in turn, provided Diamcor with funding to expedite the project, the diamond miner stated.
