Diamcor Secures $4.0 Million Additional Financing From New York Based Tiffany & Co.
TSX.V Symbol (DMI)
/THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES, TO "U.S. PERSONS" OR TO UNITED STATES OF AMERICA NEWS SERVICES./
KELOWNA, BC, Nov. 16, 2012 /CNW/ - Diamcor Mining Inc. (TSX-V.DMI) (the "Company") is pleased to announce that it has obtained an additional $4.0 million in financing from its long-term strategic alliance partner, world famous premier luxury jewellery and specialty retailer Tiffany & Co. ("Tiffany"). The $4,000,000 in financing will be provided by Tiffany's subsidiary, Tiffany & Co. Canada, via a $2,400,000 term loan (the "Term Loan") and a $1,600,000 convertible debt debenture (the "Convertible Debenture"). The transaction is subject to final acceptance by the TSX Venture Exchange.
The Term Loan has a fixed rate of interest of 9% and is secured by a promissory note (the "Promissory Note") which is non-amortizing until January 2014, at which time principal and interest is payable monthly in accordance with a 36 month amortization schedule. The Company has the right to repay the outstanding principal and any accrued and unpaid interest due under the Promissory Note at any time without notice or penalty.
The Convertible Debenture has a fixed rate of interest of 9% per annum, and is non-amortizing until January 2014, following which time principal and interest is payable monthly in accordance with a 36 month amortization schedule. The Company has the right to repay the outstanding principal and any accrued and unpaid interest, without penalty, on not less than 30-days' notice and subject to the conversion rights contained in the Convertible Debenture. Under the conversion rights of the Convertible Debenture, Tiffany & Co. Canada may convert the principal amount of $1,600,000, along with any accrued and unpaid interest due at that time, in whole or in part, into Class A Common Shares (the "Shares") of the Company at a conversion price of CAD $1.60 per Share. Under the conversion scenario, a maximum of 1,090,000 Shares in the Company would potentially be issued. Any Shares issued upon the conversion of any amounts due under the Convertible Debenture will be subject to a hold period which expires four months and one day from the date of issuance of the Convertible Debenture.
The sourcing, negotiation and successful completion of this additional financing transaction with Tiffany & Co. were completed by the Company's management and directors. As a result, no brokerage or finder's fees were incurred by the Company.
As part of the commissioning and testing exercises underway at the Project, Company executives in conjunction with various equipment manufacturers and engineering firms continuously evaluated material from the deposit, the current quarrying and in-field screening equipment, and in certain cases performed tests on new equipment using material from the Project. As a result of these efforts, the Company believes the deployment of additional dry-scrubbing and screening equipment will not only more efficiently treat material in the +10mm size fraction, but also further enhance the treatment of all material and provide additional operational efficiencies and enhance recoveries over the long-term. In conjunction with the closing of this additional financing, the Company plans to proceed with the immediate procurement of this equipment and expand the current capabilities of the quarrying and in-field screening operations. Additional information on the equipment being added will be provided by the Company in a separate news release in the coming weeks.
"We are very pleased with the continued support of our strategic alliance partner Tiffany and Co. and their willingness to support our expansion plans" commented Diamcor President and Chief Executive Officer, Mr. Dean H. Taylor, "We believe deploying this additional equipment now will allow us to further enhance results which are already meeting or exceeding our expectations, and provide us with the ability to expedite our overall goals and targets for the long-term", added Mr. Taylor.
Project Status Overview:
The extensive planning, development and construction of site infrastructure at Krone-Endora at Venetia was successfully completed over a period of less than 18 months, which has positioned the Company to now further advance the development of the Project and pursue near-term production. Following the completion of the above-mentioned commissioning and testing exercises, the Company plans to focus on achieving targeted staged monthly operational increases through a move to trial mining to provide the Company with production and cash flow. The Company anticipates that the move to full scale mining will coincide with the confirmation by the South African Department of Mineral Resources of the issuance of a mining right which has been applied for and is currently in process. In conjunction with the full scale mining exercises, the Company also plans to carry out a bulk sampling programme on new areas of the Project not previously accounted for in the initial NI 43-101 Technical Report filed by the Company as part of the acquisition process. These efforts are designed to support the future filing of an updated NI 43-101 Technical Report, and to assist Management when developing long-term production targets and decisions for the Project.
Strategic Tiffany & Co. Alliance:
As announced on March 29, 2011, the Company has established a long-term strategic alliance and first right of refusal with world famous New York based Tiffany & Co. to purchase up to 100% of the future production of rough diamonds (excluding Specials, individual stones of 10.8 carats or greater) from the Krone-Endora at Venetia Project at current prices to be determined by the parties on an ongoing basis. In conjunction with this right of first refusal, Tiffany & Co. also provided the Company with substantial financing to advance the Project as quickly as possible. Tiffany & Co. is a publically traded company which is listed on the New York Stock Exchange under the symbol TIF. Originally founded in 1837, the Tiffany's name is now globally recognised as one of the premier luxury jewellery and specialty retailers in the world. Through Tiffany & Co. and various other subsidiaries, the company is engaged in product design, manufacturing, and retailing activities on a global basis. As of July 31, 2012 Tiffany & Co. operated 260 stores and boutiques in the Americas, Japan, Asia-Pacific, and Europe and engages in direct selling through internet, catalog and business gift operations. For additional information on Tiffany & Co., please visit their website at www.tiffany.com.
About Krone-Endora at Venetia:
On February 28, 2011, Diamcor successfully acquired the Krone-Endora at Venetia Project from De Beers Consolidated Mines Limited, consisting of the prospecting rights over the farms Krone 104 and Endora 66, which represent a combined surface area of approximately 5,888 hectares directly adjacent to De Beers' flagship Venetia Diamond Mine in South Africa. De Beers previously completed various exploration efforts on initial areas of interest comprised of approximately 307 hectares, a summary of which was reported in an initial Independent NI 43-101 Technical Report filed by the Company on July 30, 2009. The deposits which occur on the properties of Krone and Endora have been identified as a rare, higher-grade "Alluvial" basal deposit which is covered by a lower-grade upper "Eluvial" deposit. The deposits are proposed to be the result of the direct-shift (in respect to the "Eluvial" deposit) and erosion (in respect to the "Alluvial" deposit) of an estimated combined 1,000 m (1 km) of material from the higher grounds of the adjacent Venetia Kimberlite areas. The deposits on Krone-Endora occur in two layers with an average total depth of less than 15.0 metres from surface to bedrock, allowing for a very low-cost mining operation to be employed with the potential for near-term diamond production from a known high-quality source. Krone-Endora also benefits from the significant development of infrastructure and services already in place due to its location directly adjacent to the Venetia Mine. Since acquiring Krone-Endora the Company has completed the construction and installation of extensive infrastructure at the Project, along with the installation of a purpose built modular processing plant. Commissioning of the processing plant is now underway, and the Company's current efforts are designed to be a continuation of the ongoing advancement of the Project.
About Diamcor Mining Inc:
Diamcor Mining Inc. is a fully reporting publically traded junior diamond mining company which is listed on the TSX Venture Exchange under the symbol V.DMI, and on the OTC QX International under the symbol DMIFF. The Company has a well-established operational and production history in South Africa, and extensive experience supplying rough diamonds to the world market. Rather than exposing itself to the high risks and costs associated with exploration, the Company's focus is on the identification, acquisition, and operation of unique diamond projects with near-term production potential such as the Krone-Endora at Venetia Project. For additional information on Diamcor, please visit our website at www.diamcormining.com.
On behalf of the Board of Directors
Mr. Dean H. Taylor
President & CEO
Diamcor Mining Inc.
Phone: (250) 864-3326
This press release contains certain forward-looking statements. While these forward-looking statements represent our best current judgement, they are subject to a variety of risks and uncertainties that are beyond the Company's ability to control or predict and which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Further, the Company expressly disclaims any obligation to update any forward looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. This news release is not for dissemination in the United States, to "U.S. Persons" or to United States of America news services.
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SOURCE: Diamcor Mining Inc.For further information:
Mr. Dean H. Taylor
President & CEO
Diamcor Mining Inc.
Phone: (250) 864-3326