Firestone Diamonds plc, the AIM-quoted diamond development company, says it has entered into the Absa Debt Facility, Subscription Agreements and the Mezzanine Facility Agreement, in relation to the Fundraising, pursuant to which the company has raised, in aggregate, approximately US$225.2 million (£137.3 million).
The funds will be used to build and commission the Main Treatment Plant and supporting infrastructure at the Liqhobong Diamond Mine, located in the Lesotho Highlands.
Accordingly the Placing, Subscription and Open Offer will complete on Admission of the New Ordinary Shares which is expected to occur on 29 May 2014, together with the issue of Warrants to Pacific Road and RCF VI to subscribe for, in aggregate, 487,864,372 new Ordinary Shares at a price of 6.15 US cents per new Ordinary Share (3.75 pence per new Ordinary Share).
Draw down of the Mezzanine Facility and the Absa Debt Facility are subject to the satisfaction of conditions precedent that are standard for facilities of this type. The Company currently anticipates that the majority of the proceeds from the Placing and the Subscription will be utilised prior to the drawdown of the Absa Debt Facility and the Mezzanine Facility.
Drawdown of the Absa Debt Facility is also subject to, inter alia, ABSA and the Export Credit Insurance Corporation SOC Ltd (“ECIC”), entering into the binding documentation for the insurance cover in respect of the Absa Debt Facility. ECIC has agreed, subject to payment of the insurance premium by the Company, to provide 100% political risk and 85% commercial risk insurance cover for a period of six years from the first drawdown of the Absa Debt Facility. ECIC is the Republic of South African Government’s official Export Credit Agency.
The total cost for the Absa Debt Facility is expected to be approximately 8.9 per cent. per annum, which includes all finance and insurance related charges and costs.
Stuart Brown, Chief Executive Officer of Firestone, said entering into the financing agreements, following receipt of Shareholders’ approval for the Fundraising at the General Meeting, is the concluding element to the project financing package required for Firestone to commence building the Main Treatment plant at its Liqhobong Diamond Mine in Lesotho.
“We look forward to beginning the early earth works on the Project in the coming weeks following receipt of funds from the Placing and Subscription on Admission.”
Unless the context otherwise requires, defined terms used in this announcement shall have the meanings given to them in the Circular.
Unless otherwise stated, the basis of translation of pounds sterling into US dollars for the purposes of inclusion in this announcement is £1.00/US$1.6398, being, for consistency, the exchange rate used to calculate the number of New Ordinary Shares to be issued to Pacific Road and RCF VI pursuant to the Subscription Agreements which was fixed as at the date of the Announcement.