RNS Number : 4642B
Cape Diamonds PLC
15 August 2008
Cape Diamonds Plc
Termination of merger discussions and toll treatment contract
15 August 2008
The Company announces that discussions relating to the proposed acquisition by Cape
Diamonds of the entire issued share capital of KMG
Diamond Resources (Pty) Limited ("KMG SA"), the operating subsidiary of KMG Diamond Resources
Plc ("KMG"), have terminated.
The Company also announces that the toll treatment agreement announced on 23 May 2008,
between the Company and KMG's subsidiary, KMG
Mining Services (Pty) Limited ("KMG Mining Services"), has also been terminated, with
immediate effect. This agreement was to toll process
the tailings deposit at the Frank Smith Mine operated by KMG SA, on a cost plus basis using
Cape Diamond's DMS plant at the Elandslaagte
Mine.
In the interim, the Company has secured £1 million from Keysha Investments 194 (Pty)
Limited (the "Investor/s") by way of a convertible
loan (the "Loan"), the conversion of which is subject to shareholder approval. The proceeds of
the Loan will be used to recapitalise Golden
Falls Mining (Pty) Ltd and for general working capital purposes.
As part of this Loan the shares owned by Cape Diamonds Plc in Golden Falls Mining (Pty)
Limited, directly and via its wholly owned
subsidiary, Dominion Mining Investments (Pty) Limited (totalling 74.4%) have been pledged as
security to the Investor/s for the Loan,
pending the approval of shareholders, which pledge will fall away and be of no further force
and effect upon the conversion of the loan in
accordance with a number of detailed provisions.
In the event of such shareholder approval not being obtained, and Cape Diamonds Plc not
repaying the loan within the pre-determined
period, the Investor/s would be entitled to acquire shares in Golden Falls Mining (Pty)
Limited based on the agreed formula which would
enable them to convert the loan/s into the pro rata holding of 74.9% of the shares in Golden
Falls Mining (Pty) Limited which were subject
to the pledge.
Further details will be announced to shareholders and will be contained within a circular,
detailing the various resolutions to be
proposed to shareholders and the reasons for their proposal, which will be posted to
shareholders in due course.
The Board are reviewing the strategy of the Company going forward and will report to
shareholders shortly.
The suspension will be lifted and restoration of trading in the Company's ordinary shares
on AIM will occur on Monday 18th August 2008
at 7.30am.
Enquiries:
Cape Diamonds Plc
Dr Anna Mokgokong
Chairperson
+27 (12) 3476 180
Oren Lubow
Non-executive Director
+972 (54) 33-20-908
www.capediamonds.com
W.H. Ireland
Tim Cofman-Nicoresti
+44 (0)121 265 6330
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUVUSRWWRWAAR
|