Subiaco-based Elkedra Diamonds NL has secured a $5 million standby finance facility with West Perth-based managed investment scheme LinQ Resources Fund.
Subiaco-based Elkedra Diamonds NL has secured a $5 million standby finance facility with West Perth-based managed investment scheme LinQ Resources Fund.
The facility is being put in place as a contingency against unforeseen problems in the initial months of ramping up production at Elkedra's Chapada Diamond project in Brazil to full capacity.
The Chapada project is expected to produce its first diamonds in June and is looking at ramping up production to produce in the order of 30,000 carats of high quality diamonds annually.
At 1255 WST, shares in LinQ were up 3 cents to 55 cents.
Below are the full announcements:
LinQ Capital Limited , Responsible Entity of the LinQ Resources Fund, and Elkedra Diamonds NL are pleased to announce that they have agreed terms for a A$5m Standby Finance Facility.
The Facility is being put in place as a contingency against unforeseen problems in the initial months of ramping up production at the Chapada Diamond Project in Brazil to full capacity. The Chapada Project is expected to produce its first diamonds in June and is looking at ramping up production to produce in the order of 30,000 carats of high quality diamonds annually.
The first line of $3 million, if drawn, will result in the issue of 2,000,000 options exercisable at 90 cents. The second line of $2 million, if drawn, will result in the issue of 1,000,000 options exercisable at $1.20. Each of the options will have a four year term.
As a minimum, the Company will issue 20% of each class of options, i.e. 400,000 options exercisable at $0.90 and 200,000 options exercisable at $1.20, on acceptance of this facility. The facility carries a 10% coupon and is secured.
In September 2005, LRF provided $5 million of project finance to the Company, proceeds of which were used to develop the Chapada Project. Provision of additional lines of finance is further indication of the confidence of LinQ Capital in the Chapada Project.
CHAPADA PROJECT COMMISSIONING UPDATE AND STANDBY FACILITY
Chapada Diamond Project Commissioning
Elkedra Diamonds is pleased to advise that gravel feed has now been treated through the front end Feed Preparation module of the Chapada diamond recovery plant and a stockpile of washed and screened material is now ready for the ore flow commissioning of the heavy media section of the plant. The plant services and tailings disposal systems have also been commissioned. Water testing of the heavy media circuits is currently in progress and media and gravel feed is scheduled to be introduced to this section of the plant by the end of the week. The concentrate from the heavy media module will then provide the feed for commissioning of the
subsequent magnetic separation and X-ray sorting plant modules.
Chairman, Don Best who is currently in Brazil for the commissioning said "We are very pleased with the initial performance of the feed preparation section of the plant. We are not anticipating any major problems with commissioning the remaining plant modules but realistically we now expect to be recovering diamonds during the month of June".
