Diamcor Mining Secures Crucial Financing: Fueling Operational Growth and Diamond Recoveries

Diamcor Mining Inc., a prominent name in the diamond exploration and recovery sector, recently marked a significant milestone with the successful closing of the second and final tranche of its “revised non-brokered private placement of units (the Financing).” This strategic financial maneuver has substantially bolstered the company’s capital, setting a robust foundation for its ongoing operational enhancements and long-term objectives at the Krone-Endora Project in South Africa.

The journey to this pivotal financial position began earlier this year when Diamcor announced the initial closing of the first tranche in June. This first phase alone generated gross proceeds totaling an impressive US$ 2,000,582.50. Building on this momentum, the recently concluded second tranche saw the Company issue an additional 3,510,315 units, accumulating further proceeds of US$ 1,228,610.25. Cumulatively, this comprehensive financing initiative has injected over US$ 3.2 million into Diamcor’s coffers, providing critical resources for the advancement of its ambitious operational plans.

Understanding the Private Placement: Shares, Warrants, and Strategic Investment

Diamcor meticulously structured this private placement to offer investors an attractive combination of equity and future potential. As elaborated by the Company, “Each Unit consists of one common share (a Share) of the Company, and one-half of one common share purchase warrant (a Warrant).” This structure effectively links the immediate equity ownership with an opportunity for additional investment at a predetermined price, signaling confidence in the company’s future valuation.

Each whole Warrant bundled with these units provides its holder with the right to purchase one additional common share at an exercise price of CDN$ 0.60. This exercise right extends until August 29, 2021, offering investors a substantial window to convert their warrants into full shares, contingent on the company’s performance and market conditions. This long exercise period provides flexibility and reflects a forward-looking perspective on Diamcor’s growth trajectory. Importantly, securities issued under the final tranche of this financing are subject to a hold period, expiring on December 30, 2018. This regulatory measure ensures stability in the market and reflects standard practices for private placements.

The Company also highlighted that units and subscription proceeds stemming from subscriptions received from members of the “Pro Group” would be held in escrow. This common practice ensures regulatory compliance and protects all parties involved until the TSX Venture Exchange grants its final approval to the Offering, an approval that was anticipated to be received imminently following the closing of the second tranche.

Facilitating the Financing: Finder’s Fees

In recognition of the crucial role played by intermediaries in securing this vital funding, Diamcor compensated two finders as part of the second tranche closing. An aggregate cash commission of CDN$ 6,510.00 was paid, representing 6% of the gross proceeds derived from subscribers introduced to the Company by these finders. This reflects a standard industry practice for non-brokered private placements, ensuring that those who facilitate capital introductions are appropriately rewarded for their efforts.

Strategic Allocation of Funds: Powering the Krone-Endora Project

The injection of over US$ 3.2 million from these two tranches of financing is not merely a financial boost; it is a strategic investment into the very heart of Diamcor’s operations. The Company explicitly stated that this capital, combined with proceeds from the tendering of rough diamonds, “will allow the Company to continue to proceed with efforts to improve recoveries of water from the Project’s settling dams to support planned increases in processing volumes at the Project for the long-term.”

This statement underscores a critical focus on sustainability and efficiency at the Krone-Endora Project. Water recovery is a paramount concern in any mining operation, particularly in regions where water resources can be scarce. By investing in improved water recovery systems from settling dams, Diamcor is not only enhancing its environmental stewardship but also directly impacting its operational capacity. Better water recovery means a more reliable and consistent water supply for processing, which is essential for achieving higher processing volumes. Increased processing volumes directly translate to the potential for greater diamond recovery, optimizing the return on investment for the project over the long term. This proactive approach to resource management is a testament to Diamcor’s commitment to sustainable and profitable mining practices.

Upcoming Diamond Tender: Showcasing Recent Recoveries

Parallel to its financing success, Diamcor remains actively engaged in its core business of diamond recovery and sales. The Company recently announced an upcoming tender of 2,618.79 carats of rough diamonds. This significant offering is scheduled to take place in Antwerp, Belgium, a world-renowned hub for the global diamond trade, in the coming week. The tender will feature a diverse range of rough diamonds, crucially including the previously announced +10.8 carat special category rough diamonds that were recently recovered. The inclusion of these larger, high-value stones is particularly noteworthy, as special category diamonds often command premium prices and significantly contribute to a tender’s overall value.

Diamond tenders are a critical revenue stream for mining companies like Diamcor. They provide a transparent and competitive platform for selling rough diamonds to a global network of buyers, ensuring fair market value. The consistent recovery and tendering of diamonds, especially those in the special category, are key indicators of a project’s productivity and the effectiveness of its recovery processes. The proceeds from these tenders directly contribute to the company’s financial health, supporting ongoing operations and funding future growth initiatives, thereby complementing the capital raised through private placements.

CEO’s Vision: Operational Excellence and Innovative Processing

Dean H. Taylor, Diamcor’s CEO, provided insightful commentary on the company’s operational advancements, stating, “Our revised facilities are demonstrating their effectiveness in reducing the fines issue, and the results of initial processing, along with the recovery of larger special rough diamonds, is promising.” This statement highlights two critical areas of success: improved operational efficiency and the recovery of high-value diamonds, both of which are central to Diamcor’s profitability.

The “fines issue” refers to the presence of very small diamond particles or non-diamond material that can complicate the recovery process and lead to inefficiencies. Reducing fines means a cleaner, more efficient separation process, which directly improves the yield and quality of recovered diamonds. The effectiveness of the “revised facilities” in addressing this issue indicates successful technological upgrades and process optimizations at the Krone-Endora Project. This focus on improving the foundational aspects of processing is crucial for long-term operational success.

A Two-Staged Approach to Enhanced Processing

CEO Taylor further elaborated on the company’s strategic approach: “A two-staged approach of first refining the facilities’ crushing and screening efficiencies prior to the installation of paste thickening is proving effective, as it is providing us with the ability to increase processing volumes as expected, with the results of those efforts aimed at reducing the relative size of the paste thickener, and the associated costs, for the long-term.” This detailed explanation reveals a well-thought-out strategy for maximizing efficiency and minimizing costs.

The first stage, focusing on “refining the facilities’ crushing and screening efficiencies,” is fundamental. Proper crushing ensures that the ore is broken down to the optimal size for diamond liberation, while efficient screening separates material based on size, preventing smaller diamonds from being lost and larger ones from being over-processed. By perfecting these initial steps, Diamcor ensures that subsequent processes, such as diamond separation, are more effective and less prone to inefficiencies. This optimization directly supports the goal of increasing processing volumes, as material is prepared more effectively for the next stages.

The second stage involves “paste thickening.” Paste thickeners are vital in modern mining for dewatering tailings (waste material). They create a dense, non-segregating paste that can be stored more efficiently, requiring less water and reducing the environmental footprint of tailings dams. By refining crushing and screening *before* installing paste thickening, Diamcor is taking a proactive and intelligent approach. The improvements in the initial stages lead to a reduction in the volume and complexity of material that needs to be paste-thickened. This pre-optimization allows the company to potentially install a smaller, less costly paste thickener, saving significant capital expenditure and operational costs in the long run. This strategic phasing demonstrates a commitment to both operational excellence and financial prudence.

The Future Outlook for Diamcor Mining

The successful closing of this significant private placement, coupled with robust operational improvements and consistent diamond tenders, positions Diamcor Mining Inc. for a promising future. The capital raised provides the necessary financial bedrock to implement critical infrastructure upgrades, particularly those related to water recovery and processing efficiency at the Krone-Endora Project. These enhancements are not just about short-term gains but are strategically designed to support increased processing volumes and optimize diamond recovery over a sustained period.

The CEO’s emphasis on a two-staged approach, prioritizing foundational crushing and screening efficiencies before moving to advanced tailings management, highlights a pragmatic and effective operational strategy. This focus on getting the basics right first ensures that subsequent technological investments yield maximum benefit, leading to reduced operational costs and increased overall productivity. The recovery of special category rough diamonds further underscores the potential value inherent in the Krone-Endora Project.

As Diamcor continues to execute its plans, investors and industry observers will be keenly watching the results of these strategic initiatives. The company’s commitment to improving water recovery, enhancing processing capabilities, and consistently bringing high-quality rough diamonds to market through tenders paints a picture of a company diligently working towards sustainable growth and enhanced shareholder value in the dynamic global diamond industry.

News Source: gjepc.org