Miscellaneous
January 26 2009 - 1:11AM
UK Regulatory
TIDMDON
DiamonEx Limited
AIM Release
26 January 2009
SUSPENSION FROM TRADING
DiamonEx Limited (DiamonEx) has requested a suspension to trading of
its shares on its primary exchange the Australian Securities Exchange
(ASX). A copy of this letter follows. Please note that a trading
halt of DiamonEx's ASX traded shares has been in place since 10.00
a.m. 22 January 2009 (Australian Eastern Daylight Time). Under the
ASX Listing Rules and the occurrence of a national public holiday on
26 January 2009, the suspension of DiamonEx's ASX traded shares will
commence on and from 10.00 a.m. 27 January 2009 (Australian Eastern
Daylight Time).
Yours faithfully
Paul Crawford
Company Secretary
26 January 2009
Mr Patrick O'Connor
ASX Ltd (Brisbane)
By Email
Dear Sir
Request for Suspension in trading of DiamonEx Limited Shares
The Board of DiamonEx Limited (DiamonEx) requests a suspension in
trading of the DiamonEx Shares on the ASX, in accordance with ASX
Listing Rule 17.2.
Reasons for the request
DiamonEx through Diamonex Botswana Limited has made an application to
the High Court of Botswana for an order to place its 100% owned
subsidiary Diamonex Botswana Limited into judicial management, a
process under Botswana law which is similar in effect to Voluntary
Administration under Australian Law. The hearing took place on
Friday, 23 January 2009 (Botswana time). An order for judicial
management has been made (Order) and Diamonex Botswana Limited is now
granted a period of immunity from claims from its creditors. The
making of the Order may place DiamonEx in breach of covenants with a
number of its borrowers and DiamonEx has commenced negotiations with
these lenders, which are ongoing and the outcome of which are
uncertain.
Length of the Suspension
The suspension in trading of DiamonEx's shares is being sought up
until 2 March 2009.
Events that will happen which will end the Suspension
The successful conclusion of negotiations with the company's
financiers and an ongoing and sustainable operating plan being agreed
upon for the continued operations of Diamonex Botswana Limited.
Background
The Lerala Diamond Mine Project (Lerala Mine) entered into production
in the second half of calendar year 2008. In DiamonEx's quarterly
report released on 31 October 2008, the company confirmed that
DiamonEx offered for sale by tender its first batch of diamonds
produced by the Lerala Mine. Due to global financial uncertainty and
the lack of liquidity existing at that time, the price received per
carat for the parcel was US$20.00. This price was far below
expectation and the general market price for diamonds over the last
24 to 36 months.
WWW International Diamond Consultants valued the parcel at an average
price of US$48.00 per carat. This valuation was supported by the
government of Botswana's independent diamond valuer.
DiamonEx in the light of the market conditions looked at various
sources of interim funding to make up for the poor price received
from this first sale. As released to the market by an announcement
dated 26 November 2008, the government of Botswana has given a
guarantee on a financing facility provided to DiamonEx by the Stanbic
Bank, Botswana.
Diamonex Botswana Limited
As a result of the cash flow problems caused by the unexpected and
ongoing collapse in the diamond market Diamonex Botswana Limited
resolved to file an application for judicial administration with the
court. As stated as the Order has been granted, Diamonex Botswana
Limited will have a judicial manager appointed to it and the ongoing
management of Diamonex Botswana Limited will be carried out by the
judicial manager. As long as the Order is in force, all actions by
creditors will be stayed.
DiamonEx's planned actions
The company intends to pursue the following course of action:
1. DiamonEx will continue to operate the Lerala Mine; and
2. Operationally, DiamonEx will proceed on a medium term strategy
which will see:
* a reduction in operating costs for the Lerala Mine as
further mine expansion will be halted; and
* the continued processing of the stockpiled ore
(approximately 363,000 tonnes) which the company estimates will
result in production level of 28 carats per 100 tonnes (this
estimate is based on the company's recent experience regarding
diamond production from the stockpiled ore).
DiamonEx is planning to carry out discussions with two key finance
providers, to reach acceptable arrangements so that these lenders are
in agreement with the steps being taken and the status of the
financing arrangements are maintained.
DiamonEx will make a further announcement to the market once there
has been an agreement reached with the lenders.
Yours faithfully
DiamonEx Limited
Paul Crawford
Company Secretary
For further information contact:
Dan O'Neill
Tel: + 61 7 37208944
Managing Director
Fax: + 61 7 37208988
Email: doneill@diamonex.com.au Mob: + 61 4 07596942
Mark Gray
Tel: + 61 7 37208944
Corporate Development Fax: + 61 7
37208988
Email: mgray@diamonex.com.au Mob: + 61 4 12899979
Will Souter or Rob Adamson
RFC Corporate Finance Ltd (Nomad)
Tel: +61 2 9250 0050
+61 2 9250 0041
Email: will.souter@rfc.com.au
rob.adamson@rfc.com.au
Fox-Davies Capital Ltd (AIM Broker)
Tel: +44 20 7936 5200
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This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
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