Wrap Text
Proposed placing to raise c.£1 million and Operational and Corporate Update
DiamondCorp plc
AIM share code: DCP & JSE share code: DMC
ISIN: GB00B183ZC46
(Incorporated in England and Wales)
(Registration number 05400982)
(SA company registration number 2007/031444/10)
("DiamondCorp", "the Company" or “the Group”)
Proposed placing to raise c.£1 million
Operational and Corporate Update
DiamondCorp, the Southern African diamond mining, development and exploration company,
provides the following corporate and operational updates and outlook in respect of the Lace
mine and the business rescue implemented in respect of the Company’s 74% operating
subsidiary Lace Diamond Mines (Pty) Limited (“LDM”) ("Business Rescue").
The Company also announces a proposed conditional placing to raise gross proceeds of c.£1
million (the “Placing”) through the issuance of new ordinary shares of 0.1 pence each in the
Company (the “Placing Shares”) with attached warrants over new ordinary shares
(“Warrants”) on the basis of one Warrant for every Placing Share subscribed. It is expected
that the Placing Shares will be priced at, or around, 4 pence each, with each Warrant
expected to be exercisable at 1 pence between 1 November 2017 and 30 June 2019.
The Placing is being conducted through a bookbuilding process which will be launched
immediately following this announcement, will be made to new and existing eligible
institutional and other investors, and the books are expected to close no later than 09:00 UK
time on 19 January 2017, but Panmure Gordon reserves the right to close the books earlier,
without further notice. Completion and settlement of the Placing is conditional upon, inter alia,
concluding a labour agreement with the Association of Mineworkers and Construction Union
(“AMCU”) that is on terms approved by the Business Rescue Practitioner (Deloitte & Touche,
the “BRP”), on behalf of LDM, and by the Board of DiamondCorp.
Highlights
- The Group has entered into standstill agreements with the Group’s UK and South
African bondholders.
- As previously announced, a standstill agreement has been reached with LDM’s
primary secured lender, the Industrial Development Corporation of South Africa (the
“IDC”).
- Discussions are ongoing between Deloitte & Touche (the BRP) and the Company,
and between the BRP and the labour unions and the non-unionised workforce with
respect to the implementation of the care and maintenance and remediation work,
which has yet to commence.
- An agreement between the BRP and AMCU with respect to retrenchments and
outstanding wages needs to be finalised in the very near term or it is likely that the
Group will not be a going concern and will enter into insolvency proceedings.
- Management continues to evaluate, in conjunction with the BRP, the Group’s capital
requirements during, and in the event of a successful conclusion of, the Business
Rescue process. Capital will be required in a phased manner to fund the Group’s
critical expenditure requirements as the Business Rescue process continues (Phase
1) and, if then successfully concluded, resume Lace mining operations and
recommence the ramp-up of production from the UK4 mine (Phase 2).
- Proposed conditional Placing of £1 million in respect of Phase 1:
o Anticipated Placing Price of 4 pence each, with accompanying Warrants
(exercisable at 1 pence between the period of 1 November 2017 and 30 June
2019 and issued on a 1 for 1 basis per Placing Share;
o Net proceeds of the Placing, together with the Group’s current cash, to be
utilised towards: Lace mine care and maintenance and mine remediation
costs; the costs of the ongoing Business Rescue process; and cash
settlement of the agreement to be reached with respect to labour;
o Settlement of the Placing is anticipated to occur on 25 January 2017 and is
conditional upon, inter alia, concluding a labour agreement with the AMCU
that is on terms approved by the BRP, on behalf of LDM, and by the Board of
DiamondCorp;
o Certain of the Company's major institutional shareholders have indicated a
willingness to participate in the Placing.
Corporate and Operational Update
- The Lace mine is currently non-operational, pending receipt of sufficient funding to
enter into the care and maintenance and remediation process.
- LDM’s insurance policy covers the flood damage to movable equipment (subject to
payment of a 10% excess) and the level of cover is considered sufficient to carry out
the repairs necessary to the damaged longhole drill rig, which will need to be
conducted offsite. The insurance claim is ongoing.
- Settlement negotiations are continuing between the BRP and the insurance company
with respect to LDM’s ongoing insurance claim in respect of an incident prior to the
flood and a resolution on this is anticipated shortly.
- The Group currently has cash equivalent to c.£240,000.
- At LDM, and based on current exchange rates, the Company is the largest creditor
with c.£36 million owed in a subordinated shareholder loan. LDM’s Senior Secured
lender is the IDC with a c.£18 million project loan. Trade creditors are c.£1.5 million.
- In addition, c.£3.7 million is owed to UK and South African bond holders, c.£5 million
to Laurelton Diamonds, c.£0.5 million to Rasmala plc and c.£0.1 million to trade
creditors.
- The Group’s net debt is c.£29 million, based on current exchange rates.
- Please refer to the announcement dated 19 December 2016 in respect of the various
standstill and amendment agreements that the Group has entered into with a number
of its creditors to periods of between, variously, 30 March 2017 and until the
completion of the Business Rescue proceedings.
- The Group has also now formally entered into standstill agreements with: (i) the
Group’s UK bondholders until such time as Business Rescue proceedings in respect
of LDM have been concluded; and (ii) the South African bondholders until such time
as Business Rescue proceedings in respect of LDM have been concluded or until 13
March 2017, whichever occurs first. Should an extension be necessary, the Group
would seek to extend the duration of the various creditor standstill and amendment
agreements where and if deemed appropriate.
- The Company’s shares will remain suspended and it is expected that a lifting of the
suspension shall not be sought until the successful completion of the Business
Rescue process and completion of the anticipated Phase 2 fundraise, as further
described below.
Outlook
- In order to formally enter into, and complete, a care and maintenance and mine
remediation programme at the Lace mine, it is critical that an agreement first be
reached with the AMCU to address retrenchments and reach a settlement on the
balance of labour for the period up to completion of care and maintenance (expected
to be until the end of April 2017) and those employees required for recommencement
of production ramp-up from the UK4 mine.
- During the Phase 1 care and maintenance and mine remediation period, the
Company will recommence mine water pumping and rehabilitate underground
roadways, thereby enabling the longhole drill rig to be brought to surface, repair and
restore underground electrical reticulation and ready the mine for restart while the rig
is rebuilt by Sandvik.
- In the same period, the BRP must complete a business rescue plan to restructure
LDM’s creditor position such that LDM, and the Group, is sufficiently recapitalised to
achieve a solvent exit from the Business Rescue process. Once proposed, the
Business Rescue plan is to be voted upon by LDM creditors and, as stated above,
the Company and IDC are significantly the largest creditors to LDM in aggregate.
Whilst financial projections are ongoing by management, the BRP and PwC, it is
currently estimated that the necessary Phase 2 funding could be approximately £3-5
million.
- If the BRP is successful in achieving an affordable labour agreement and obtaining
approval of the ‘rescue plan’, and the Company completes its Phase 2 funding, then
UK4 mining operations are expected to resume a ramp up, over a period of
approximately four months following completion of the care and maintenance
programme, to 30,000 tonnes per month of blasted kimberlite. This level of
commercial production could be continued for approximately 24 months.
- While the Phase 2 mining of UK4 continues, the Company would need to arrange
additional funding in order to access and develop kimberlite deeper than the existing
production level, notably the proposed 500m block cave level.
- Management is in various discussions with certain senior personnel with a view to
them joining the Company in conjunction with the Phase 2 fundraise and manage the
Lace mine production and development activities. Such positions are anticipated to
include Executive and Non-executive Board appointments.
- Mr Loudon, CEO, has expressed a willingness in principle to accept payment of a
majority of accrued and future remuneration by way of new equity. Terms have yet to
be agreed.
The Placing
As discussed above, and further detailed below, the net proceeds of the Placing, in
conjunction with current cash on hand and anticipated insurance claim payments, will be
utilised towards funding the Group’s critical expenditure requirements during the Business
Rescue and care and maintenance and mine rehabilitation period and through to early to mid-
April 2017. The Placing is also anticipated to enable the Group to reach an agreement with
AMCU in the very near term, which is critical to the implementation of care and maintenance
programme and to the success of the ongoing Business Rescue process.
It should be highlighted that completion of the Placing, and settlement of the Placing
Shares and Warrants, is conditional upon, inter alia, the Group entering into an
agreement with the AMCU, the labour union covering the Lace mine, to reduce the
ongoing labour expenses at the Lace mine, such that there is adequate cover for the
care and maintenance expenses and mine remediation costs to prepare the mine for a
restart of production ramp up from the UK4 mine (should the Business Rescue
conclude successfully).
No assurances can be given at this stage that (i) the Company will successfully
conclude a AMCU labour agreement on terms approved by both the BRP, on behalf of
LDM, and by the Board of DiamondCorp, either in sufficient time for completion of the
Placing or at all; or that (ii) the Business Rescue process and concurrent additional
fundraise will be concluded successfully by early April 2017 or at all.
In the event that a satisfactory labour agreement is not entered into, and the Placing
not completed, in the very near term, it is likely that the Group will not be a going
concern and will enter into insolvency proceedings. Notwithstanding a successful
labour agreement and completion of the Placing, in the event that the Business Rescue
process and concurrent additional Phase 2 fundraise is not successfully concluded by
early April 2017, it is likely that the Group will not be a going concern at that point and
will enter into insolvency proceedings.
It should further be noted that the Company’s shares will remain suspended and it is
expected that a lifting of the suspension shall not be sought until a successful
conclusion of the Business Rescue process and completion of the anticipated Phase 2
fundraise.
Use of proceeds
The net proceeds of the Placing, in conjunction with current cash on hand and anticipated
insurance claim payments will be used towards funding the Group’s critical expenditure
requirements until early to mid-April 2017 with a view to seeking to be in a position to
successfully conclude the Business Rescue process at that time, alongside a Phase 2
fundraise, as discussed above. Specifically, the net proceeds will be used, based on current
exchange rates, as follows:
- Lace Mine care and maintenance costs until early to mid-April 2017 (c. £649,000)
- Direct Business Rescue costs: (c. £285,000)
- General LDM and DiamondCorp corporate costs, including ancillary Business Rescue
expenses : (c. £190,000)
The Group’s remaining cash balance will be made available to reach a labour settlement. The
Company also has the potential to apply additional funds raised towards strengthening the
Company’s balance sheet and aiding a successful conclusion of the Business Rescue
process.
Details of the Placing
The Placing will be conducted in accordance with the terms and conditions set out in
Appendix I. The Placing will be effected by way of a bookbuilding process to be managed by
Panmure Gordon (UK) Limited ("Panmure Gordon"). The bookbuilding process will
commence with immediate effect. The timing of the closing of the book, pricing and
allocations is at the absolute discretion of Panmure Gordon, although the closing of the book
is currently anticipated to occur no later than 09:00 UK time on 19 January 2017. The price at
which the Placing Shares are to be placed (the "Placing Price") and the number of Placing
Shares with attached Warrants will be agreed by the Company with Panmure Gordon at the
close of the bookbuilding period. Details of the Placing Price and the number of Placing
Shares with attached Warrants will be announced as soon as practicable after the close of the
bookbuilding process. The Placing Shares will, when issued, be credited as fully paid and will
rank equally in all respects with the existing ordinary shares of the Company, including the
right to receive all dividends and other distributions declared, made or paid in respect of such
shares after the date of issue of the Placing Shares.
The Warrants, which will be issued on the basis of one Warrant for each Placing Share
subscribed for are expected to be exercisable at 1 pence at any time during the period
commencing on 1 November 2017 and expiring on 30 June 2019. In addition, the Warrants
shall be exercisable at any time until 30 June 2019 in the event of a change in control of the
Company. The Warrants, which will be transferable, will not be admitted to trading on AIM,
AltX or otherwise. The instrument constituting the Warrants will contain customary limited
anti-dilution provisions, covering certain limited events such as, inter alia, sub-division or
consolidation of the Company’s Ordinary Shares.
Certain of the Company's major institutional shareholders have indicated a willingness to
participate in the Placing.
Completion of the Placing is conditional, inter alia, on:
- concluding a labour agreement with the AMCU that is on terms approved by both the
BRP, on behalf of LDM, and the Board of DiamondCorp; and
- admission of the Placing Shares to the AIM Market of the London Stock Exchange plc
(“AIM”), becoming effective by no later than 8.00 a.m. on 25 January 2017 or such
other date (being not later than 8.00 a.m. on 31 January 2017) as the Company and
Panmure Gordon may agree.
Application will be made for the Placing Shares to be admitted to the AIM Market of the
London Stock Exchange plc (“AIM”) and the Alternative Exchange of the JSE Limited (“AltX”).
Settlement for and Admission of the Placing Shares is currently expected to take place on 25
January 2017. However, trading will not commence until the lifting of the existing trading
suspension has been granted and therefore the Placing Shares will be subject to the ongoing
trading suspension on AIM and AltX.
The Company reserves the right to settle certain applicable investors’ participation(s) by way
of a direct subscription with the Company, having consulted with Panmure Gordon.
Panmure Gordon will receive professional fees pursuant to both the Placing and in
satisfaction of certain outstanding indebtedness in the form of new Ordinary Shares at the
Placing Price and warrants on the same terms as the Warrants.
This Announcement should be read in its entirety. In particular, your attention is drawn to the
"Important Information" section of this Announcement, to the detailed terms and conditions of
the Placing and further information relating to the bookbuilding process described in Appendix
I. By choosing to participate in the Placing and by making an oral and legally binding offer to
acquire Placing Shares, each with one Warrant attached, investors will be deemed to have
read and understood this Announcement in its entirety and to be making such offer on the
terms and subject to the conditions in it, and to be providing the representations, warranties,
acknowledgements and undertakings contained in Appendix I.
This announcement contains inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No 596/2014 ("MAR"). Market soundings, as defined in MAR, were
taken in respect of the Placing with the result that certain persons became aware of inside
information, as permitted by MAR. That inside information is set out in this announcement and
has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR.
Therefore, those persons that received inside information in a market sounding are no longer
in possession of inside information relating to the Company and its securities.
Contact details:
DiamondCorp plc
Chris Ellis, Interim Non-Executive Chairman
Tel: +44 (0) 20 3151 0970
Paul Loudon, Chief Executive
Tel: +27 56 216 1300
UK Broker, Sole Placing Agent & Nominated Adviser
Panmure Gordon (UK) Limited
Adam James / Atholl Tweedie
Tel: +44 20 7886 2500
Contacts for the Bookbuild:
Jamie Campbell (Specialist Sales): 020 7886 2736
Tom Salvesen (Corporate Broking): 020 7886 2904
JSE Designated Adviser
Sasfin Capital (a division of Sasfin Bank Limited)
Megan Young
Tel: +27 11 445 8068
SA Corporate Adviser
Qinisele Resources Proprietary Limited
Dennis Tucker / Andrew Brady
Tel: +27 11 883 6358
Important Information
This Announcement contains (or may contain) certain forward-looking statements with
respect to certain of the Company's plans and its current goals and expectations relating to its
future financial condition and performance and which involve a number of risks and
uncertainties. The Company cautions readers that no forward-looking statement is a
guarantee of future performance and that actual results could differ materially from those
contained in the forward-looking statements. These forward-looking statements can be
identified by the fact that they do not relate only to historical or current facts. Forward-looking
statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate",
"intend", "plan", "goal", "believe", or other words of similar meaning. By their nature, forward-
looking statements involve risk and uncertainty because they relate to future events and
circumstances, including, but not limited to, economic and business conditions, the effects of
continued volatility in credit markets, market-related risks such as changes in the price of
commodities or changes in interest rates and foreign exchange rates, the policies and actions
of governmental and regulatory authorities, changes in legislation, the further development of
standards and interpretations under International Financial Reporting Standards ("IFRS")
applicable to past, current and future periods, evolving practices with regard to the
interpretation and application of standards under IFRS, the outcome of pending and future
litigation or regulatory investigations, the success of future explorations, acquisitions and
other strategic transactions and the impact of competition. A number of these factors are
beyond the Company's control. As a result, the Company's actual future results may differ
materially from the plans, goals, and expectations set forth in the Company's forward-looking
statements. Any forward-looking statements made in this Announcement by or on behalf of
the Company speak only as of the date they are made. Except as required by the Financial
Conduct Authority (the "FCA"), the London Stock Exchange or applicable law, the Company
expressly disclaims any obligation or undertaking to release publicly any updates or revisions
to any forward-looking statements contained in this Announcement to reflect any changes in
the Company's expectations with regard thereto or any changes in events, conditions or
circumstances on which any such statement is based.
This Announcement is for information purposes only and shall not constitute an offer to buy,
sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for
any securities, nor shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction.
This Announcement does not contain an offer or constitute any part of an offer to the public
within the meaning of Sections 85 and 102B of the Financial Services and Markets Act 2000,
as amended ("FSMA") or otherwise. This Announcement is not an "approved prospectus"
within the meaning of Section 85(7) of FSMA and a copy of it has not been, and will not be,
delivered to the FCA in accordance with the Prospectus Rules or delivered to any other
authority which could be a competent authority for the purpose of the Prospectus Directive. Its
contents have not been examined or approved by the London Stock Exchange plc, nor has it
been approved by an "authorised person" for the purposes of Section 21 of FSMA.
This Announcement has been issued by and is the sole responsibility of the Company. No
representation or warranty, express or implied, is or will be made as to, or in relation to, and
no responsibility or liability is or will be accepted by Panmure Gordon or by any of its
respective affiliates or agents as to, or in relation to, the accuracy or completeness of this
Announcement or any other written or oral information made available to or publicly available
to any interested party or its advisers, and any liability therefore is expressly disclaimed.
Panmure Gordon, which is authorised and regulated in the United Kingdom by the FCA, is
acting as placing agent for the Company and for no-one else in connection with the Placing,
and Panmure Gordon will not be responsible to anyone other than the Company for providing
the protections afforded to its customers or for providing advice to any other person in relation
to the Placing or any other matter referred to herein.
The distribution of this Announcement and the offering of the Placing Shares with Warrants in
certain jurisdictions may be restricted by law. No action has been taken by the Company or
Panmure Gordon that would permit an offering of such shares or possession or distribution of
this Announcement or any other offering or publicity material relating to such shares in any
jurisdiction where action for that purpose is required. Persons into whose possession this
Announcement comes are required to inform themselves about, and to observe such
restrictions.
This Announcement, including the Appendix, is not for distribution or dissemination, directly or
indirectly, in or into the United States or any jurisdiction into which the same would be
unlawful. No public offering of securities of the Company will be made in connection with the
Placing in the United Kingdom, the United States, the EEA, Switzerland or elsewhere.
This Announcement is not intended to constitute an offer or solicitation to purchase or invest
in the Placing Shares.
Persons (including, without limitation, nominees and trustees) who have a contractual or other
legal obligation to forward a copy of the Appendix or this Announcement should seek
appropriate advice before taking any action.
The Placing Shares to which this Announcement relates may be illiquid and / or subject to
restrictions on their resale. Prospective purchasers of the Placing Shares should conduct their
own due diligence on the Placing Shares. If you do not understand the contents of this
Announcement or its Appendix you should consult an authorised financial adviser.
The information in this Announcement may not be forwarded or distributed to any other
person and may not be reproduced in any manner whatsoever. Any forwarding, distribution,
dissemination, reproduction, or disclosure of this information in whole or in part is
unauthorised. Failure to comply with this directive may result in a violation of the United
States Securities Act of 1933 (as amended) ("US Securities Act") or the applicable laws of
other jurisdictions.
Neither the content of the Company's website nor any website accessible by hyperlinks on
the Company's website is incorporated in, or forms part of, this Announcement.
Appendix I: Terms and Conditions of the Placing
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING.
THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE
"ANNOUNCEMENT") AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED
AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, CANADA OR ITS
TERRITORIES, AUSTRALIA, JAPAN, THE REPUBLIC OF IRELAND, OR ANY
JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. PERSONS INTO WHOSE
POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED BY THE COMPANY
AND PANMURE GORDON TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY
SUCH RESTRICTIONS.
THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER OR INVITATION
TO UNDERWRITE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN
THE COMPANY.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX,
BUSINESS AND RELATED ASPECTS OF A SUBSCRIPTION FOR THE PLACING
SHARES.
Persons (including individuals, funds or otherwise) who have chosen to participate in the
Placing, by making an oral or written offer to subscribe for Placing Shares will be deemed to
have read and understood the Announcement, including this Appendix in its entirety and to be
making such offer on the terms and conditions, and to be providing the representations,
warranties, acknowledgements, and undertakings contained in this Appendix.
In this Appendix, unless the context otherwise requires, "Placee" means a person (including
individuals, funds or others) by whom or on whose behalf a commitment to subscribe for
Placing Shares has been given. In particular, each such Placee represents, warrants and
acknowledges that:
1. it will acquire, hold, manage or dispose of any Placing Shares with Warrants that are
allocated to it for the purposes of its business;
2. in the case of any Placing Shares with Warrants acquired by it as a financial
intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the
Placing Shares with Warrants acquired by it in the Placing have not been acquired on
behalf of, nor have they been acquired with a view to their offer or resale to, persons
in any Member State of the European Economic Area which has implemented the
Prospectus Directive other than Qualified Investors or in circumstances in which the
prior consent of Panmure Gordon has been given to the offer or resale; or (ii) where
Placing Shares with Warrants have been acquired by it on behalf of persons in any
member state of the EEA other than Qualified Investors, the offer of those Placing
Shares with Warrants to it is not treated under the Prospectus Directive as having
been made to such persons;
3. (a) (i) it is not in the United States and (ii) it is not acting for the account or benefit of a
person in the United States, unless in the case of this clause (ii), it is acting with full
investment discretion for such person or, if such person is a corporation or
partnership, the person agreeing to purchase the Placing Shares with Warrants is an
employee of such person authorised to make such purchase; (b) it is a dealer or other
professional fiduciary in the United States acting on a discretionary basis for a non-
US person (other than an estate or trust) in reliance on Regulation S; (c) it is
otherwise acquiring the Placing Shares with Warrants in an "offshore transaction"
meeting the requirements of Regulation S under the US Securities Act of 1933, as
amended (the 'Securities Act”); or (d) it is a "qualified institutional buyer" (a "QIB")
(as defined in Rule 144A under the Securities Act) and it has duly executed an
investor letter in a form provided to it and delivered the same to Panmure Gordon or
its affiliates;
4. it is acquiring the Placing Shares with Warrants for its own account or is acquiring the
Placing Shares with Warrants for an account with respect to which it exercises sole
investment discretion and has the authority to make and does make the
representations, warranties, indemnities, acknowledgements and agreements
contained in this Announcement; and
5. it understands (or, if acting for the account of another person, such person
understands) the resale and transfer restrictions set out in this Appendix.
The Company and Panmure Gordon will rely upon the truth and accuracy of the foregoing
representations, acknowledgements and agreements.
Details of the Placing
Panmure Gordon has entered into an agreement with Diamondcorp (the "Placing
Agreement") under which, subject to the conditions set out in that agreement, Panmure
Gordon has agreed to use its reasonable endeavours to procure subscribers for the Placing
Shares at the placing price that is to be determined as set out below with certain institutional
and other investors. Under the terms of the Placing subscribers of Placing Shares will be
allotted and issued one Warrant for every Placing Share so subscribed. The Warrants are
exercisable into Ordinary Shares on a one for one basis at a price of 1 pence each at any
time during the period commencing on 1 November 2017 and expiring on 30 June 2019. The
Warrants shall also be exercisable at any time in the event of a change in control of the
Company. Panmure Gordon will receive professional fees pursuant to both the Placing and in
satisfaction of certain outstanding indebtedness in the form of new Ordinary Shares at the
Placing Price and warrants on the same terms as the Warrants.
The Placing is conditional upon the Placing Agreement becoming unconditional in all
respects. The Placing is also conditional upon entering into a labour agreement with AMCU
on terms approved by both the BRP, on behalf of LDM, and the Board of DiamondCorp.
The Placing Shares will, when issued, rank pari passu in all respects with the existing issued
Ordinary Shares, including the right to receive dividends and other distributions declared,
made or paid following Admission.
Applications for admission
Applications will be made to the London Stock Exchange for admission of the Placing Shares
(“Admission") to AIM and to the alternative exchange of the JSE. It is expected that
Admission will become effective on AIM at 8.00 a.m. on 25 January 2017. No application will
be made for admission of the Warrants to trading on AIM or the alternative exchange of the
JSE. The Company’s ordinary shares shall remain suspended on AIM and AltX until further
notice.
Participation in, and principal terms of, the Placing
Panmure Gordon is arranging the Placing as agent for and on behalf of the Company.
Participation in the Placing will only be available to Placees who may lawfully be, and are,
invited to participate by Panmure Gordon.
The Placing Price and the number of Placing Shares with Warrants to be issued will be
agreed between Panmure Gordon and the Company following completion of a bookbuilding
exercise by Panmure Gordon (the "Bookbuild"). The Placing Price and number of Placing
Shares with Warrants will be announced on a Regulatory Information Service following the
completion of the Bookbuild.
The Placees will also be allotted with one Warrant for every Placing Share subscribed for.
The Warrants are expected to be exercisable at 1 pence at any time during the period
commencing on 1 November and expiring on 30 June 2019. In addition, the Warrants are
expected to be exercisable at any time in the event of a change in control of the Company.
The Warrants will not be admitted to trading on AIM, AltX or otherwise. The instrument
constituting the Warrants will contain customary limited anti-dilution provisions, covering
certain limited events such as, inter alia, sub-division or consolidation of the Company’s
Ordinary Shares.
Panmure Gordon will determine in its absolute discretion the extent of each Placee's
participation in the Placing, which will not necessarily be the same for each Placee and this
will be confirmed orally by Panmure Gordon as agent of the Company ("Confirmation"). No
element of the Placing will be underwritten. Confirmation will constitute an irrevocable legally
binding commitment upon that person (who will at that point become a Placee) to subscribe
for the number of Placing Shares allocated to it at the Placing Price on the terms and
conditions set out in this Appendix (a copy of the terms and conditions having been provided
to the Placee prior to or at the same time as such oral confirmation) and in accordance with
the Company's articles of association. For the avoidance of doubt, the Confirmation
constitutes each Placee's irrevocable legally binding agreement, subject to the Placing
Agreement not having been terminated, to pay the aggregate settlement amount for the
Placing Shares to be subscribed for by that Placee regardless of the total number of Placing
Shares (if any) subscribed for by any other investor(s).
Panmure Gordon reserves the right to scale back the number of Placing Shares to be
subscribed by any Placee in the event of an oversubscription under the Placing. Panmure
Gordon also reserves the right not to accept offers for Placing Shares or to accept such offers
in part rather than in whole.
Each Placee will be required to pay to Panmure Gordon, on the Company's behalf, the
Placing Price for each Placing Share agreed to be acquired by it under the Placing in
accordance with the terms set out herein. Each Placee's obligation to acquire and pay for
Placing Shares under the Placing will be owed to Panmure Gordon and the Company. Each
Placee has an immediate, separate, irrevocable and binding obligation, owed to Panmure
Gordon, to pay to it (or as it may direct) in cleared funds an amount equal to the product of
the Placing Price and the number of Placing Shares for which such Placee has agreed to
subscribe. Each Placee will be deemed to have read and understood the Appendix in its
entirety, to the participating in the Placing upon the terms and conditions contained in the
Appendix, and to be providing the representations, warranties, agreements,
acknowledgements and undertakings, in each case as contained in the Appendix. To the
fullest extent permitted by law and applicable Financial Conduct Authority ("FCA") rules (the
"FCA Rules"), (i) neither Panmure Gordon, (ii) nor any of its directors, officers, employees or
consultants, nor (iii) to the extent not contained within (i) or (ii), any person connected with
Panmure Gordon as defined in the FCA Rules ((i), (ii) and (iii) being together "affiliates" and
individually an "affiliate"), shall have any liability to Placees or to any person other than the
Company in respect of the Placing.
Irrespective of the time at which a Placee's participation in the Placing is confirmed,
settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be
made at the same time, on the basis explained below under "Registration and Settlement".
Completion of the Placing will be subject to the fulfilment of the conditions referred to below
under "Conditions of the Placing" and to the Placing not being terminated on the basis
referred to below under "Termination of the Placing Agreement". In the event that the Placing
Agreement does not become unconditional in any respect or is terminated, the Placing (save
to the extent already completed) will not proceed and all funds delivered by the Placee to
Panmure Gordon in respect of the Placee's participation will be returned to the Placee at the
Placee's risk without interest, (save where Placing Shares have been validly issued to
Placees).
By participating in the Placing, each Placee agrees that its rights and obligations in respect of
the Placing will terminate only in the circumstances described below and will not otherwise be
capable of rescission or termination by the Placee.
By participating in the Placing, each Placee is deemed to have read and understood this
Announcement, including this Appendix, in its entirety and to be making such offer on the
terms and conditions, and to be providing the representations, warranties,
acknowledgements, and undertakings contained in the Appendix.
To the fullest extent permissible by law, neither the Company, Panmure Gordon nor any of
their affiliates shall have any liability to Placees (or to any other person whether acting on
behalf of a Placee or otherwise). In particular, neither Panmure Gordon nor any of its affiliates
shall have any liability (including to the extent permissible by law, any fiduciary duties) in
respect of Panmure Gordon's conduct of the Bookbuild or of such alternative method of
effecting the Placing as Panmure Gordon and the Company may agree.
Conditions of the Placing
The obligations of Panmure Gordon under the Placing Agreement in respect of the Placing
Shares and Warrants are conditional on, amongst other things:
(a) the Company having complied with its obligations under the Placing Agreement (to the
extent that such obligations fall to be performed prior to Admission);
(b) the Company entering into a labour agreement with the AMCU that is approved by both
the BRP, on behalf of LDM, and the Board of DiamondCorp; and
(c) Admission having occurred not later than 8.00 a.m. 25 January 2017 or such later date
as the Company and Panmure Gordon may agree, but in any event not later than 8.00
a.m. on 31 January 2017.
If (i) any of the conditions contained in the Placing Agreement in relation to the Placing
Shares are not fulfilled or waived by Panmure Gordon by the respective time or date where
specified, (ii) any of such conditions becomes incapable of being fulfilled or (iii) the Placing
Agreement is terminated in the circumstances specified below, the Placing will not proceed
and the Placee's rights and obligations hereunder in relation to the Placing Shares with
Warrants shall cease and terminate at such time and each Placee agrees that no claim can
be made by the Placee in respect thereof.
Panmure Gordon, at its discretion and upon such terms as it thinks fit, may waive compliance
by the Company with the whole or any part of any of the Company's obligations in relation to
the conditions in the Placing Agreement. Any such extension or waiver will not affect Placees'
commitments as set out in this Announcement.
Neither Panmure Gordon, the Company nor any other person shall have any liability to any
Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect
of any decision they may make as to whether or not to waive or to extend the time and/or the
date for the satisfaction of any condition to the Placing nor for any decision they may make as
to the satisfaction of any condition or in respect of the Placing generally, and by participating
in the Placing each Placee agrees that any such decision is within the absolute discretion of
Panmure Gordon.
Termination of the Placing Agreement
Panmure Gordon is entitled (but after, where practicable, having consulted with the Company)
at any time before Admission, to terminate the Placing Agreement in relation to its obligations
in respect of the Placing Shares with Warrants (save to the extent already performed) by
giving notice to the Company if, amongst other things:
(a) the Company fails, in any material respect, to comply with any of its obligations under
the Placing Agreement; or
(b) any of the warranties given by the Company in the Placing Agreement was untrue,
inaccurate or misleading in any material respect when made or has ceased to be true
and accurate in a material respect or has become misleading in a material respect by
reference to the facts and circumstances then subsisting; or
(c) an event of force majeure occurs or there is a material adverse change in the financial
position and/or prospects of the Company or any member of the Group.
Upon such termination, the parties to the Placing Agreement shall be released and
discharged (except for any liability arising before or in relation to such termination and save to
the extent already performed) from their respective obligations under or pursuant to the
Placing Agreement subject to certain exceptions.
By participating in the Placing, the Placees agree that the exercise by Panmure Gordon of
any right of termination or other discretion under the Placing Agreement shall be within the
absolute discretion of Panmure Gordon and that it need not make any reference to the
Placees and that it shall have no liability to the Placees whatsoever in connection with any
such exercise or failure so to exercise.
No prospectus
No offering document, prospectus or admission document has been or will be submitted to be
approved by the FCA or submitted to the London Stock Exchange in relation to the Placing
and the Placees' commitments will be made solely on the basis of the information contained
in this Announcement (including the Appendix) released by the Company today.
Each Placee, by accepting and participating in the Placing, agrees that the content of this
Announcement (including the Appendix) is exclusively the responsibility of the Company and
confirms that it has neither received nor relied on any other information, representation,
warranty, or statement made by or on behalf of the Company, Panmure Gordon or any other
person and neither Panmure Gordon nor the Company nor any other person will be liable for
any Placee's decision to participate in the Placing based on any other information,
representation, warranty or statement which the Placees may have obtained or received.
Each Placee acknowledges and agrees that it has relied on its own investigation of the
business, financial or other position of the Company in accepting a participation in the
Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent
misrepresentation.
Registration and settlement
Settlement of transactions in the Placing Shares following Admission will take place within the
system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain
exceptions. The Company reserves the right to require settlement for and delivery of the
Placing Shares (or a portion thereof) to Placees in certificated form if, in the opinion of
Panmure Gordon, delivery or settlement is not possible or practicable within the CREST
system or would not be consistent with the regulatory requirements in the Placee's
jurisdiction.
The Warrants will not be admitted to CREST and will be issued in certificated form.
Certificates will be posted to Placees shortly after Admission.
Participation in the Placing is only available to persons who are invited to participate in it by
Panmure Gordon.
A Placee's commitment to acquire a fixed number of Placing Shares with Warrants under the
Placing will be agreed orally with Panmure Gordon and a contract note will be despatched as
soon as possible thereafter. Such agreement will constitute a legally binding commitment on
such Placee's part to acquire that number of Placing Shares at the Placing Price on the terms
and conditions set out or referred to in the Appendix and subject to the Company's Articles of
Association.
Following the close of the Bookbuild, each Placee allocated Placing Shares in the Placing will
be sent trade confirmations in accordance with the standing arrangements in place with
Panmure Gordon, stating the number of Placing Shares allocated to it at the Placing Price
and the number and key terms of the Warrants, the aggregate amount owed by such Placee
to Panmure Gordon and settlement instructions.
Each Placee agrees that it will do all things necessary to ensure that delivery and payment is
completed in accordance with the standing CREST or certificated settlement instructions that
it has in place with Panmure Gordon. Settlement should be through Panmure Gordon against
CREST ID: 83801. For the avoidance of doubt, it is anticipated that Placing allocations will be
booked with a trade date of 19 January 2017 and settlement date of 25 January 2017.
The Company will deliver the Placing Shares to the CREST accounts operated by Panmure
Gordon as agent for the Company and Panmure Gordon will enter its delivery (DEL)
instruction into the CREST system. The input to CREST by a Placee of a matching or
acceptance instruction will then allow delivery of relevant Placing Shares to that Placee
against payment. The Placing Shares will be held as nominee for the relevant Placee.
It is expected that settlement of the Placing Shares will take place on 25 January 2017, on a
delivery versus payment basis.
The Company will deliver certificates for the Warrants to Placees in accordance with the
certificated settlement instructions that each Placee has in place with Panmure Gordon.
Interest is chargeable daily on payments not received from the Placees on the due date in
accordance with the arrangements set out above at the rate of four per cent. per annum
above the base lending rate of the Bank of England, as determined by Panmure Gordon.
Each Placee is deemed to agree that, if it does not comply with these obligations, the
Company may sell any or all of the Placing Shares and Warrants allocated to that Placee on
such Placee's behalf and retain from the proceeds, for the Company's account and benefit, an
amount equal to the aggregate amount owed by the Placee plus any interest due. The
relevant Placee will, however, remain liable for any shortfall below the aggregate amount
owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together
with any interest or penalties) which may arise upon the sale of such Placing Shares and
Warrants on such Placee's behalf.
If Placing Shares and Warrants are to be delivered to a custodian or settlement agent,
Placees should ensure that the trade confirmation is copied and delivered immediately to the
relevant person within that organisation. Insofar as Placing Shares and Warrants are
registered in a Placee's name or that of its nominee or in the name of any person for whom a
Placee is contracting as agent or that of a nominee for such person, such Placing Shares and
Warrants should, subject as provided below, be so registered free from any liability to UK
stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or
commission in connection with the Placing.
Representations and Warranties
References in these Representations and Warranties to “Placing Shares” shall be deemed to
include the Warrants as the context may require.
By participating in the Placing, each Placee (and any person acting on such Placee's behalf)
acknowledges, undertakes, represents, warrants and agrees (as the case may be) with
Panmure Gordon and the Company, in each case as a fundamental term of their application
for Placing Shares, the following:
That it:
1. represents and warrants that it has read this Announcement, including the Appendix, in
its entirety and that its acquisition of Placing Shares is subject to and based upon all
the terms, conditions, representations, warranties, acknowledgements, agreements and
undertakings and other information contained herein and undertakes not to redistribute
or duplicate this Announcement;
2. acknowledges that it has received this Announcement solely for its use and has not
redistributed or duplicated it;
3. acknowledges and agrees that no offering document, prospectus or admission
document has been or will be prepared in connection with the Placing and represents
and warrants that it has not received a prospectus, admission document or other
offering document in connection with the Placing or the Placing Shares;
4. acknowledges that its participation in the Placing shall also be subject to the provisions
of the Placing Agreement and the memorandum and articles of association of the
Company in force both before and immediately after Admission;
5. acknowledges that the ordinary shares in the capital of the Company are admitted to
trading on AIM and on the alternative exchange of the JSE, and the Company is
therefore required to publish certain business and financial information in accordance
with the rules and practices of AIM and the JSE (collectively, the "Exchange
Information"), which includes a description of the nature of the Company's business
and the Company's most recent balance sheet and profit and loss account and that it is
able to obtain or access such Exchange Information without undue difficulty and is able
to obtain access to such information or comparable information concerning any other
publicly traded company without undue difficulty;
6. acknowledges that neither Panmure Gordon nor the Company nor any of their
respective affiliates or any person acting on behalf of any of them has provided, and will
not provide, it with any material regarding the Placing Shares or the Company other
than this Announcement; nor has it requested any of Panmure Gordon, the Company,
any of their respective affiliates or any person acting on behalf of any of them to provide
it with any such information;
7. acknowledges that the content of this Announcement is exclusively the responsibility of
the Company and that neither Panmure Gordon nor any person acting on its behalf has
or shall have any liability for any information, representation or statement contained in
this Announcement or any information previously published by or on behalf of the
Company and will not be liable for any Placee's decision to participate in the Placing
based on any information, representation or statement contained in this Announcement
or otherwise. Each Placee further represents, warrants and agrees that the only
information on which it is entitled to rely and on which such Placee has relied in
committing itself to subscribe for the Placing Shares is contained in this Announcement
and any information previously published by the Company by notification to a
Regulatory Information Service, such information being all that it deems necessary to
make an investment decision in respect of the Placing Shares and that it has neither
received nor relied on any other information given or representations, warranties or
statements made by Panmure Gordon or the Company or their respective affiliates and
neither Panmure Gordon nor the Company nor their respective affiliates will be liable for
any Placee's decision to accept an invitation to participate in the Placing based on any
other information, representation, warranty or statement. Each Placee further
acknowledges and agrees that it has relied on its own investigation of the business,
financial or other position of the Company in deciding to participate in the Placing;
8. represents and warrants that it has neither received nor relied on any inside information
(as defined in section 118C of the Financial Services and Markets Act 2000, as
amended ("FSMA")) concerning the Company in accepting this invitation to participate
in the Placing;
9. acknowledges that neither Panmure Gordon nor any person acting on its behalf nor any
of their respective affiliates has or shall have any liability for any publicly available or
filed information, or any representation relating to the Company, provided that nothing
in this paragraph excludes the liability of any person for fraudulent misrepresentation
made by that person;
10. represents and warrants that it has complied with its obligations under the Criminal
Justice Act 1993, section 118 of FSMA and in connection with money laundering and
terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 (as
amended), the Terrorism Act 2006, the Money Laundering Regulations 2007 and MAR
(the "Regulations") and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any government agency having jurisdiction in respect
thereof and the Money Laundering Sourcebook of the FCA and, if making payment on
behalf of a third party, that satisfactory evidence has been obtained and recorded by it
to verify the identity of the third party as required by the Regulations;
11. if a financial intermediary, as that term is used in Article 3(2) of EU Directive
2003/71/EC, as amended (the "Prospectus Directive") (including any relevant
implementing measure in any member state), represents and warrants that the Placing
Shares subscribed for by it in the Placing will not be acquired on a non-discretionary
basis on behalf of, nor will they be acquired with a view to their offer or resale to,
persons in a member state of the European Economic Area which has implemented the
Prospectus Directive other than to qualified investors, or in circumstances in which the
prior consent of Panmure Gordon has been given to the proposed offer or resale;
12. represents and warrants that it has not offered or sold and will not offer or sell any
Placing Shares to persons in the United Kingdom, except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or otherwise in circumstances
which have not resulted and which will not result in an offer to the public in the United
Kingdom within the meaning of section 85(1) of FSMA;
13. represents and warrants that it has not offered or sold and will not offer or sell any
Placing Shares to persons in the European Economic Area prior to Admission except to
persons whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted in and which will not result in an
offer to the public in any member state of the European Economic Area within the
meaning of the Prospectus Directive;
14. represents and warrants that it has only communicated or caused to be communicated
and will only communicate or cause to be communicated any invitation or inducement
to engage in investment activity (within the meaning of section 21 of FSMA) relating to
the Placing Shares in circumstances in which section 21(1) of FSMA does not require
approval of the communication by an authorised person;
15. represents and warrants that it has complied and will comply with all applicable
provisions of FSMA with respect to anything done by it in relation to the Placing Shares
in, from or otherwise involving, the United Kingdom;
16. represents and warrants that it is a person falling within Article 19(5) and/or Article
49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion)
Order 2005, as amended, or is a person to whom this Announcement may otherwise be
lawfully communicated;
17. acknowledges that any offer of Placing Shares may only be directed at persons in
member states of the European Economic Area who are "qualified investors" within the
meaning of Article 2(1)(e) of the Prospectus Directive and represents and agrees that it
is such a qualified investor;
18. represents and warrants that it and any person acting on its behalf is entitled to
subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to it
and that it has all necessary capacity and has obtained all necessary consents and
authorities to enable it to commit to this participation in the Placing and to perform its
obligations in relation thereto (including, without limitation, in the case of any person on
whose behalf it is acting, all necessary consents and authorities to agree to the terms
set out or referred to in this Announcement) and will honour such obligations, and that
its subscription of the Placing Shares will be in compliance with applicable laws and
regulations in the jurisdiction of its residence, the residence of the Company, or
otherwise.
19. acknowledges and agrees that the Placing Shares have not been and will not be
registered under the Securities Act or with any securities regulatory authority of any
state or jurisdiction of the United States, or the relevant Canadian, Japanese,
Australian or Irish securities legislation and therefore the Placing Shares may not be
offered, sold, transferred or delivered directly or indirectly into the United States,
Canada, Japan, Australia or the Republic of Ireland or their respective territories and
possessions, except subject to limited exemptions;
20. warrants that it has complied with all relevant laws of all relevant territories, obtained all
requisite governmental or other consents which may be required in connection with the
Placing Shares, complied with all requisite formalities and that it has not taken any
action or omitted to take any action which will or may result in Panmure Gordon, the
Company or any of their respective directors, officers, agents, employees or advisers
acting in breach of the legal or regulatory requirements of any territory in connection
with the Placing;
21. acknowledges and agrees that its purchase of Placing Shares does not trigger, in the
jurisdiction in which it is resident or located: (i) any obligation to prepare or file a
prospectus or similar document or any other report with respect to such purchase; (ii)
any disclosure or reporting obligation of the Company; or (iii) any registration or other
obligation on the part of the Company;
22. undertakes that it (and any person acting on its behalf) will make payment for the
Placing Shares allocated to it in accordance with this Announcement on the due time
and date set out herein, failing which the relevant Placing Shares may be placed with
other subscribers or sold as Panmure Gordon may in its discretion determine and
without liability to such Placee;
23. acknowledges that neither Panmure Gordon nor any of its affiliates, nor any person
acting on behalf of any of them, is making any recommendations to it, advising it
regarding the suitability of any transactions it may enter into in connection with the
Placing and that participation in the Placing is on the basis that it is not and will not be a
client of Panmure Gordon for the purposes of the Placing and that neither Panmure
Gordon has no duties or responsibilities to it for providing the protections afforded to its
clients or for providing advice in relation to the Placing nor in respect of any
representations, warranties, undertakings or indemnities contained in the Placing
Agreement nor for the exercise or performance of any of its rights and obligations
thereunder including any rights to waive or vary any conditions or exercise any
termination right;
24. undertakes that the person whom it specifies for registration as holder of the Placing
Shares will be (i) itself or (ii) its nominee, as the case may be. Neither Panmure Gordon
nor the Company will be responsible for any liability to stamp duty or stamp duty
reserve tax resulting from a failure to observe this requirement. Each Placee and any
person acting on behalf of such Placee agrees to participate in the Placing and it
agrees to indemnify the Company and Panmure Gordon in respect of the same on the
basis that the Placing Shares will be allotted to the CREST stock account of Panmure
Gordon who will hold them as nominee on behalf of such Placee until settlement in
accordance with its standing settlement instructions;
25. acknowledges that these terms and conditions and any agreements entered into by it
pursuant to these terms and conditions and any non-contractual obligations arising out
of or in connection with such agreements shall be governed by and construed in
accordance with the laws of England and Wales and it submits (on behalf of itself and
on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the
English courts as regards any claim, Placing dispute or matter arising out of any such
contract, except that enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest chargeable thereon) may be
taken by the Company or Panmure Gordon in any jurisdiction in which the relevant
Placee is incorporated or in which any of its securities have a quotation on a
recognised stock exchange;
26. acknowledges that Panmure Gordon and its affiliates will rely upon the truth and
accuracy of the representations, warranties and acknowledgements set forth herein and
which are irrevocable and it irrevocably authorises Panmure Gordon to produce this
Announcement, pursuant to, in connection with, or as may be required by any
applicable law or regulation, administrative or legal proceeding or official inquiry with
respect to the matters set forth herein;
27. agrees to indemnify on an after tax basis and hold the Company and Panmure Gordon
and their respective affiliates harmless from any and all costs, claims, liabilities and
expenses (including legal fees and expenses) arising out of or in connection with any
breach of the representations, warranties, acknowledgements, agreements and
undertakings in the Appendix and further agrees that the provisions of the Appendix
shall survive after completion of the Placing;
28. represents and warrants that it will acquire any Placing Shares subscribed for by it for
its account or for one or more accounts as to each of which it exercises sole investment
Placing discretion and it has full power to make the acknowledgements, representations
and agreements herein on behalf of each such account;
29. acknowledges that its commitment to subscribe for Placing Shares on the terms set out
herein and in the relevant contract notes will continue notwithstanding any amendment
that may in future be made to the terms of the Placing and that Placees will have no
right to be consulted or require that their consent be obtained with respect to the
Company's conduct of the Placing. The foregoing representations, warranties and
confirmations are given for the benefit of the Company and Panmure Gordon. The
agreement to settle a Placee's subscription (and/or the subscription of a person for
whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve
tax depends on the settlement relating only to the subscription by it and/or such person
direct from the Company for the Placing Shares in question. Such agreement assumes,
and is based on a warranty from each Placee, that neither it, nor the person specified
by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for,
and that the Placing Shares will not be allotted to, a person who is or may be liable to
stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the
Finance Act 1986 (depositary receipts and clearance services). If there are any such
arrangements, or the settlement relates to any other dealing in the Placing Shares,
stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees
that it shall be responsible for such stamp duty or stamp duty reserve tax, and neither of
the Company, nor Panmure Gordon shall be responsible for such stamp duty or stamp
duty reserve tax. If this is the case, each Placee should seek its own advice and notify
Panmure Gordon accordingly;
30. understands that no action has been or will be taken by any of the Company, Panmure
Gordon or any person acting on behalf of the Company or Panmure Gordon that would,
or is intended to, permit a public offer of the Placing Shares in any country or
jurisdiction where any such action for that purpose is required;
31. in making any decision to subscribe for the Placing Shares, confirms that it has
knowledge and experience in financial, business and international investment matters
as is required to evaluate the merits and risks of subscribing for the Placing Shares. It
further confirms that it is experienced in investing in securities of this nature in this
sector and is aware that it may be required to bear, and is able to bear, the economic
risk of, and is able to sustain a complete loss in connection with the Placing. It further
confirms that it relied on its own examination and due diligence of the Company and its
associates taken as a whole, and the terms of the Placing, including the merits and
risks involved;
32. represents and warrants that it has (a) made its own assessment and satisfied itself
concerning legal, regulatory, tax, business and financial considerations in connection
herewith to the extent it deems necessary; (b) had access to review publicly available
information concerning the Company that it considers necessary or appropriate and
sufficient in making an investment decision; (c) reviewed such information as it believes
is necessary or appropriate in connection with its subscription of the Placing Shares;
and (d) made its investment decision based upon its own judgment, due diligence and
analysis and not upon any view expressed or information provided by or on behalf of
Panmure Gordon;
33. understands and agrees that it may not rely on any investigation that Panmure Gordon
or any person acting on its behalf may or may not have conducted with respect to the
Company, or the Placing and Panmure Gordon has not made any representation to it,
express or implied, with respect to the merits of the Placing, the subscription for the
Placing Shares, or as to the condition, financial or otherwise, of the Company, or as to
any other matter relating thereto, and nothing herein shall be construed as a
recommendation to it to subscribe for the Placing Shares. It acknowledges and agrees
that no information has been prepared by Panmure Gordon for the purposes of this
Placing;
34. accordingly it acknowledges and agrees that it will not hold Panmure Gordon or any of
its affiliates or any person acting on its behalf responsible or liable for any
misstatements in or omission from any publicly available information relating to the
Company or information made available (whether in written or oral form) in
presentations or as part of roadshow discussions with investors relating to the
Company (the "Information") and that neither Panmure Gordon nor any person acting
on behalf of Panmure Gordon makes any representation or warranty, express or
implied, as to the truth, accuracy or completeness of such Information or accepts any
responsibility for any of such Information; and
35. understands that the Placing Shares have not been and will not be, and no Ordinary
Shares issued as a result of the exercise of a Warrant will be registered under the
Securities Act or with any securities regulatory authority of any state or other
jurisdiction of the United States, and accordingly, may not be offered or sold or
otherwise transferred in the United States except pursuant to a registration statement
under the Securities Act or an exemption from the registration requirements of the
Securities Act and, in connection with any such transfer, the Company shall be
provided, as a condition to transfer, with a legal opinion of counsel, in form and by
counsel reasonably satisfactory to the Company, that no such Securities Act
registration is or will be required and with appropriate certifications by the transferee as
to appropriate matters.
The foregoing representations, warranties and confirmations are given for the benefit of the
Company and Panmure Gordon.
In addition, Placees should note that they will be liable for any stamp duty and all other stamp,
issue, securities, transfer, registration, documentary or other duties or taxes (including any
interest, fines or penalties relating thereto) payable outside the United Kingdom by them or
any other person on the subscription by them of any Placing Shares or the agreement by
them to subscribe for any Placing Shares.
Each Placee and any person acting on behalf of each Placee acknowledges and agrees that
either Panmure Gordon or any of its affiliates may, at their absolute discretion, agree to
become a Placee in respect of some or all of the Placing Shares.
All times and dates in this Announcement may be subject to amendment. Panmure Gordon
shall notify the Placees and any person acting on behalf of the Placees of any changes.
The past performance of the Company and its securities is not, and should not be relied on as
a guide to the future performance of the Company and its securities. Persons needing advice
should consult an independent financial adviser.
Definitions
“Admission” admission of the Placing Shares to AIM and such
admission becoming effective in accordance with Rule 6 of
the AIM Rules for Companies;
"AIM" the AIM Market of the London Stock Exchange plc;
"AIM Rules for Companies" the AIM Rules for Companies and including, where
applicable, any guidance notes published by the London
Stock Exchange from time to time;
"AltX" the Alternative Exchange of the JSE;
“Announcement” this announcement in its entirety;
"Articles" the articles of association of the Company in force on the
date hereof;
“Board” or “Directors” the directors of the Company, or any duly authorised
committee thereof;
“Company” DiamondCorp plc;
"CREST" the computerised settlement system (as defined in the
CREST Regulations) operated by Euroclear which
facilitates the transfer of title to shares in uncertificated
form;
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI
2001/3755) including any enactment or subordinate
legislation which amends or supersedes those regulations
and any applicable rules made under those regulations or
any such enactment or subordinate legislation for the time
being in force;
"Euroclear" Euroclear UK & Ireland Limited, a company incorporated in
England & Wales with registered number 02878738, being
the operator of CREST;
"FCA" the Financial Conduct Authority in its capacity as the
competent authority for the purposes of Part VI of FSMA;
"FSMA" the Financial Services and Markets Act 2000 (as
amended);
“Group” the Company together with its subsidiaries from time to
time;
"JSE" the JSE Limited (registration number 2005/022939/06), a
public company duly registered and incorporated under the
company laws of South Africa, licensed as an exchange
under the Financial Markets Act 2012;
“LDM” Lace Diamond Mine (Pty) Limited;
"London Stock Exchange" London Stock Exchange plc;
“Ordinary Shares” the ordinary shares of 0.1 pence each in the capital of the
Company;
“Panmure Gordon” Panmure Gordon (UK) Limited;
“Placing” the placing of the Placing Shares each with one Warrant
attached at the Placing Price pursuant to the terms of the
Placing Agreement;
“Placing Agreement” the conditional agreement dated 13 January 2017 between
the Company and Panmure Gordon relating to the Placing,
further details of which are set out in this Announcement;
"Placing Price" the price at which the Placing Shares are to be placed as
will be agreed between the Company and Panmure
Gordon;
“Placing Shares” the Placing Shares to be issued by the Company and
subscribed for pursuant to the Placing;
"Prospectus Rules" the prospectus rules of the FCA
"Regulation S" Regulation S as promulgated under the Securities Act;
"Securities Act" the United States Securities Act of 1933, as amended;
“Shareholders” holders of Ordinary Shares, from time to time.
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland;
"uncertificated" or "in recorded on the relevant register of the share or security
uncertificated form" concerned as being held in uncertificated form in CREST
and title to which, by virtue of the CREST Regulations, may
be transferred by means of CREST;
"US" the United States of America, its territories and
possessions, any state of the United States of America and
the district of Columbia and all other areas subject to its
jurisdiction;
"US Person" bears the meaning ascribed to such term by Regulation S;
"US$" the lawful currency of the US from time to time;
“Warrant” a warrant to subscribe for one Ordinary Share exercisable
at an expected price of 1 pence during the period
commencing on 1 November 2017 and expiring on 30 June
2019 on the terms of a warrant instrument to shortly be
executed by the Company;
“ZAR” the lawful currency of the Republic of South Africa from
time to time; and
"£" pounds sterling, the lawful currency of the UK from time to
time.
13 January 2017
Date: 13/01/2017 03:52:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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