DIAMONDCORP PLC - Corporate and Placing Update

Release Date: 28/02/2017 09:00
Code(s): DMC
 
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Corporate and Placing 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”)

Corporate and Placing Update

DiamondCorp, the Southern African diamond mining, development and exploration company,
announces the following update in respect of discussions with the Industrial Development
Corporation of South Africa ("IDC"), the Association of Mining & Construction Union ("AMCU")
and the Placing, as first announced on 13 January 2017.

Further to the announcement of 14 February 2017, a formal agreement (the “IDC
Agreement”) has been entered into between the IDC, the BRP and DiamondCorp Holdings
Limited (“DCH”, a wholly owned subsidiary of the Company), in relation to, inter alia, the
ability for DCH to advance a PCF loan or loans to the Group’s operating subsidiary LDM (a
“LDM PCF Loan”), with any such loan(s) secured against the assets of LDM on a basis senior
to all existing indebtedness of LDM with the exception of the first c.ZAR1.2 million that will
shortly be ceded by the IDC from proceeds of a recent insurance claim received by LDM.

Pursuant to the IDC Agreement, amounts drawn down by LDM pursuant to any LDM PCF
Loan would bear an interest rate of 13.5 per cent. per annum and would be repayable upon
completion of the Business Rescue process or after six months, whichever is sooner and
upon the election of the Company. LDM would be permitted to prepay a LDM PCF Loan at its
election without penalty.

The IDC Agreement for the provision of any LDM PCF Loan contains customary
representations, warranties and indemnities and provides for customary events of default.

The IDC Agreement provides for a LDM PCF Loan to be made either in addition to or as a
substitute for the Placing, the conditions for which have yet to be met. It is intended pursuant
to the IDC Agreement that the BRP will in due course publish a Business Rescue Plan to be
voted upon by the LDM creditors that will provide, inter alia, for DCH (and therefore the
Company) to maintain its controlling shareholding in LDM and to seek sufficient additional,
Phase 2, finance within 90 days of publication and to successfully conclude the Business
Rescue process. The BRP may also continue to solicit expressions of interest for a strategic
investor(s) in LDM.

Discussions continue between AMCU and the BRP under the supervision the South African
Commission for Conciliation, Mediation and Arbitration. In the event that the original
agreement in principle is not finalised in the very near term, then it is currently expected that
LDM's, and therefore DiamondCorp's, ability to effectively execute the mine's care and
maintenance and remediation programme will be compromised. The IDC Agreement is also
subject to entering into such an agreement with AMCU, unless otherwise waived by DCH.

The Board of DiamondCorp shall continue to explore all options available to the Group in
relation to the ongoing Business Rescue process, the IDC Agreement, the Placing, and the
Group’s creditors and other stakeholders.

The Board reiterates that there can be no assurance that an appropriate agreement with
AMCU can be obtained in sufficient time, or at, all or that sufficient finance can be obtained to
continue with the Business Rescue process. In the absence of a successful continuation and
conclusion of the Business Rescue process, it is likely that the Group would be subsequently
placed into administration.
Capitalised terms in this announcement, unless otherwise defined, have the same meaning
given to them in the announcements issued by the Company on 13, 20, 25 and/or 31 January
2017 and/or 14 February 2017, as appropriate.

This announcement contains inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No 596/2014.



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

JSE Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Megan Young
Tel: +27 11 445 8068


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 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 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 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.

United Kingdom
28 February 2017

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