Shares of Canadian diamond miner Diamcor Mining have skyrocketed 300% in Frankfurt today, Tuesday, January 28. Yesterday, Diamcor surged 25% in Toronto and 65% in the U.S. (where it trades over the counter). The driver was news that Diamcor had reached a preliminary agreement with a “well-established Dubai based manufacturer and supplier of bridal and anniversary diamonds to the global market” for a $5 million term loan.
Details
Diamcor Mining stock has surged 300% on the Frankfurt Stock Exchange today to EUR0.002 per share.
The gains followed a 25% jump on the Toronto Stock Exchange yesterday, when the stock closed at CAD0.025 per share. In over-the-counter trading in the U.S., Diamcor jumped 65% to $0.0175 per share.
Yesterday, the company announced it had signed a letter of intent with a Dubai-based company for a term loan of up to $5 million. The counterparty was not disclosed, only described as a “well-established manufacturer and supplier of bridal and anniversary diamonds.”
The financing will enable Diamcor to accelerate the processing of already-mined diamonds, complete ongoing projects, and continue bulk sampling at its primary project, the Krone-Endora mine in South Africa. That is adjacent to the Venetia mine, owned by the diamond giant De Beers.
The terms of the financing are still being finalized. It will reportedly include a security interest, and the Dubai-based company will receive a percentage of Diamcor revenue.
“While 2024 was a challenging year for everyone in the diamond industry, we believe the factors responsible for this will ultimately begin to stabilize by the second half of 2025, and this financing will help to ensure we are well positioned and ready for this anticipated recovery,” Diamcor CEO Dean Taylor said in the company’s statement.
Context
Diamcor expects a rebound in rough diamond demand in 2025. In its view, the factors that constrained the market in 2024 are beginning to abate: Market players have reduced excess inventories, tougher sanctions are being imposed on Russian diamonds, and global diamond production is expected to decline due to the depletion of existing mines and a lack of major new finds. These factors present an opportunity for companies that can supply natural conflict-free diamonds.
To take advantage of this opportunity, the company plans to boost diamond processing at Krone-Endora mine. Last year, it raised a term loan of up to CAD1.5 million (about $1.08 million) at a 15% annual interest rate. That deal entailed the issuance of additional shares and warrants as collateral. Meanwhile, Diamcor has stated that the new financing from the Dubai-based company does not require issuing any shares or warrants.
Diamcor has a long-term contract with the Canadian subsidiary of Tiffany & Co (owned by LVMH). Under the agreement, Tiffany & Co may purchase 100% of the rough diamonds from the Krone-Endora mine. In return, Tiffany has provided Diamcor with funding to advance the project as quickly as possible.
