Diamondcorp updates on operations, finances

DiamondCorp said 74%-owned subsidiary Lace Diamond Mines (Pty) Ltd has been issued with a Section 54 shut down notice on underground operations at the Lace diamond mine by the South African Department of Mineral Resources (DMR).

This related to a fire incident on a dump truck that was extinguished without injury just inside the portal to the decline.

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

Mine management is struggling to find logic in the instruction and is considering its options including legal means of redress. The Company expects that underground mining operations will remain suspended for at least one week.

As announced on 12 October 2016, the Company, in addition to its longer term financial requirements, requires additional funding in the very near term of c.£500,000 for immediate financial commitments in order to continue trading as a going concern.

The Company remains in discussion with a third party for the provision of a convertible debt facility to satisfy this requirement.

However, no assurances can be given at this stage that the provision of such finance will be entered into either in time or at all. In the absence of such a facility, it is likely that the Group will be unable to continue trading as a going concern.

The Company will update shareholders accordingly.

At 10:24am: (LON:DCP) Diamondcorp PLC share price was -0.88p at 2p