Kimberley Diamonds Ltd (KDL) has secured close to A$4 million working capital loan facility for the Lerala Diamond Mine, which is situated in north-east Botswana, 34 kilometres north of the Martin’s Drift Border Post with South Africa.
KDL said the working capital loan facility, combined with a rights issue planned for March-April 2016, would be enough to provide the funding required to take the Lerala Diamond to production.
KDL and its Botswana subsidiary, Lerala Diamond Mines Limited, have entered into sales and marketing agreement and an off-take agreement with DDA Trading BVBA (DDA), a Belgian based diamond auction house specialising in the sales and marketing of rough diamonds for the international diamond trade.
Under the terms of the agreement, the loan facility – to be provided in April-September 2016 – will carry interest rate of 10% per annum and will be secured by collateral of diamonds produced at the mine.
“DDA is to be appointed as the exclusive sales and marketing agent for the diamond produced from the Lerala Diamond Mine for a period of 3 years (which may be extended by a further 2 years by agreement between the parties),” KDL said in a statement to the ASX.
“KDL will issue 5,000,000 KDL options to DDA or its nominees, with an exercise price of $0.20, expiring 3 years from the date of issue. Under the terms of the Offtake Agreement, which is interconditional with the Sales Agreement, Lerala will also supply to DDA run of mine rough diamonds to the total value of at least USD$5 million at an agreed discount to valuation.”
KDL said that the Sales Agreement and the Offtake Agreement are related party transactions and are subject to and conditional upon shareholder approval.