DiamondCorp receives notice from South African Department of Mineral Resources for Lace Mine

DiamondCorp, the Southern African diamond mining, development and exploration company, announced receiving a notice from South African Department of Mineral Resources ("DMR") for its 74 percent owned subsidiary Lace Diamond Mines (Pty) Limited. The Section 54 shut down notice on underground operations pertains to a fire incident on a dump truck which 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". According to the company, the “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 for the near term to the tune of c.£500,000 for immediate financial commitments in order to continue trading as a going concern. It is in talks with a third party for a convertible debt facility for the same. The company further stated that at this stage no assurances can be given 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.