| Fri 15 Aug 2008, 13:00 | | DMC - DiamondCorp Plc - General meeting of shareholders for the specific issue |
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DMC
DMC
DMC - DiamondCorp Plc - General meeting of shareholders for the specific issue
of warrants
DiamondCorp Plc
JSE share code: DMC & AIM share code: DCP
ISIN: GB00B183ZC46
(Incorporated in England and Wales)
(Registration number 05400982)
(SA company registration number 2007/031444/10)
("DiamondCorp" or "the Company")
GENERAL MEETING OF SHAREHOLDERS FOR THE SPECIFIC ISSUE OF WARRANTS
1. Introduction
On Monday, 28 July 2008, shareholders were advised that DiamondCorp had entered
into a funding transaction ("funding transaction") with African Opportunity Fund
L.P ("AOF"). In terms of the funding transaction, AOF will issue DiamondCorp
with a US$5,000,000 bond, to be repaid by semi-annual coupon payments, capital
amortisation payments and the issue to AOF of 1,650,000 warrants for conversion
into DiamondCorp shares. The funding transaction is subject to shareholder
approval of the warrants ("AOF warrants" or "warrants"). In terms of the
Listings Requirements of the JSE Limited ("JSE"), the issue of the warrants to
AOF constitutes a `specific issue` as defined ("AOF specific issue").
Shareholder approval, representing not less than three-fourths (75%) of the
votes exercisable by shareholders present and voting at a general meeting,
either in person or by proxy, is therefore required.
2. The funding transaction
In terms of the funding transaction, AOF will issue DiamondCorp with a
US$5,000,000 bond and in turn DiamondCorp undertakes the following
obligations:
- to pay a coupon of 12% p.a (payable semi-annually);
- to make capital repayments according to the following schedule;
US$500,000 to be repaid 18 months after the issue date, US$1,000,000 to
be repaid 24 months after issue date, US$1,500,000 to be repaid 30
months after the issue date, and the outstanding principal of
US$2,000,000 to be repaid on the third anniversary of the issue date;
and
- to issue AOF with 1,650,000 warrants, where each warrant confers on the
AOF the right to acquire one fully paid share in DiamondCorp at a price
of 72 pence per share at any time between the date falling six months
after the issue date and the third anniversary of the issue date.
DiamondCorp has the right to redeem the bond at any time after the first
anniversary date at between 105 percent and 108 percent of face value
(depending on the date of redemption), plus accrued interest.
3. Rationale for the funding agreement
Management has focused on accelerating development of Phase Two, which is
underground mining at the Lace Mine. Phase Two requires capital expenditure
of approximately R100 million (GBP6.9 million) over 2008 and 2009 to
achieve underground production of 4,000 tonnes of kimberlite per day.
The expenditure will be financed in part by the funding transaction with
AOF, in part by the equity placement of R26 million (GBP1.8 million)
completed earlier this year, and with the balance of funding to be provided
by operating cashflow as Lace moves into underground mining later in 2008.
Also, DiamondCorp`s BEE partners, Shanduka Resources (Proprietary) Limited
and Sphere Investments (Proprietary) Limited, are scheduled to invest an
aggregate R26 million (GBP1.8 million) in 2009 upon completion of a
positive feasibility study for Phase Two. Further detail on the Lace
project is contained in the circular which has been posted to shareholders.
4. General meeting
The general meeting will be held on Monday, 1 September 2008 at 10:00 am
(UK time) at DiamondCorp`s UK registered office: First Floor, Georgian
House, 63 Coleman Street, London, EC2R 5BB.
If you are unable to attend the general meeting, but wish to be represented
thereat, you must complete and return the attached form of proxy contained
in the circular which has been posted to shareholders, in accordance with
the instructions contained therein, to be received by DiamondCorp at their
registered office at First Floor, Georgian House, 63 Coleman Street,
London, EC2R 5BB, by no later than 10:00 am (UK time), or by Computershare
SA at their registered office at Ground Floor, Marshall Street,
Johannesburg, 2001 or PO Box 61051, Marshalltown, 2107 by no later than
11:00 am (SA time) on Thursday, 28 August 2008.
5.Salient dates and times
The salient dates and times in respect of the general meeting are as
follows:
2008
Last day for receipt of forms of proxy Thursday, 28
for the general meeting by no later than August
10:00 am (UK time) and 11:00 am (SA time)
respectively
General meeting to be held at 10:00 am Monday, 1
(UK time) September
Results of the general meeting released Monday, 1
on SENS and RNS September
Results of the general meeting to be Tuesday, 2
published in the press September
6. Financial effects
The table below sets out the unaudited pro forma financial effects of the
funding transaction on DiamondCorp. The unaudited pro forma financial
effects are presented for illustrative purposes only and because of their
nature may not give a fair reflection of DiamondCorp`s results, financial
position and changes in equity after the funding transaction has been
effected. It has been assumed for purposes of the pro forma financial
effects that the funding transaction took place with effect from 1 January
2007 for income statement purposes and 31 December 2007 for balance sheet
purposes. The directors are responsible for the preparation of the
unaudited pro forma financial effects.
Publis Pro forma
hed
Scenario 12 Scenario 22
Before After Change After Change
fundin funding 6 (%) fundin 6 (%)
g transac g
transa tion3 transa
ction1 ction4
Basic loss per (6.27) (8.45) 34.77 (8.66) 38.12
share (p)
Headline loss (6.26) (8.44) 34.82 (8.65) 38.18
per share (p)
NAV per share 38.15 39.48 3.49 37.94 (0.55)
(p)
Tangible NAV 20.75 22.86 10.17 20.53 (1.06)
per share (p)
Number of 34,770 36,420, 4.75 34,770 -
shares in issue ,408 408 ,408
Weighted 33,501 34,328, 2.47 33,501 -
average number ,444 704 ,444
of shares in
issue
Notes:
1. The "Before funding transaction" financial information is based on
DiamondCorp`s published audited results for the year ended 31 December 2007.
2. The "After funding transaction" pro forma information is presented under two
scenarios. Both scenarios incorporate the issue of the US$5 million (GBP2.5
million) bond to DiamondCorp and include the transaction costs related to
the funding transaction. Of the GBP74,400 transaction costs associated with
the funding transaction, the GBP30,000 relating to the bond have been
expensed through the income statement, whilst the GBP44,400 relating to the
AOF specific issue have been written off against share premium. The income
statement has been adjusted for the GBP300,540 coupon payment on the bond
and a once-off IFRS 2 charge of GBP468,569 relating to the issue of the AOF
warrants, as calculated using a Black-Scholes model. It has been assumed
that the vesting period of the AOF warrants is 1 July 2007, in scenario 1
and 2, as the vesting period of the warrants is six months after the issue
date of the bond, as detailed in paragraph 2 above.
3. Scenario 1 presents the case where all the warrants are exercised after six
months, being 1 July 2007:
- EPS and HEPS are adjusted for the exercise of warrants at 1 July 2007.
- NAV and TNAV are adjusted to include the cash received from the issue of
the 1.65 million ordinary shares at 72 pence per share, in addition to
the cash received in terms of the loan (net of transaction costs).
4. Scenario 2 presents the case where no warrants are exercised in 2007:
- EPS and HEPS are calculated using the original weighted average number of
shares as published for the period to 31 December 2007.
- NAV and TNAV are calculated using the original number of shares in issue
as published at 31 December 2007 and the cash received in terms of the
loan (net of transaction costs).
5. An exchange rate of GBP0.5009/$, being the closing exchange rate on 31
December 2007, has been used in this pro forma analysis.
6. The percentage change has been calculated on rounded numbers.
The pro forma balance sheet and income statement relating to the AOF specific
issue are set out in the circular details of which are included in paragraph 7
below.
7. Documentation relating to the general meeting
The circular containing full details of the general meeting and the form of
proxy has been posted to shareholders today, Friday, 15 August 2008. An
electronic copy of the circular is available on the Company`s website at
www.diamondcorp.plc.uk
London
15 August 2008
Sponsor:
Investec Bank Limited
For further information, please contact:
Paul Loudon
DiamondCorp plc
+44 20 7256 2651
Joe Nally/Liz Bowman
Cenkos Securities plc
+44 20 7397 8900
Robert Smith/Tanis Crosby
Investec Bank Limited
+27 11 286 7662
Charmane Russell
Russell & Associates
+27 11 880 3924
Jane Stacey/Jos Simson
Conduit PR
+44 20 7429 6606/+44 7922 923 306
Date: 15/08/2008 13:00:56 Produced by the JSE SENS Department.
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