Diamcor Signs Strategic Agreement, $5.5M Financing with Tiffany & Co.
March 29, 11
(IDEX Online News) – Luxury retailer Tiffany & Co. will have the first right of refusal to purchase the production of Diamcor Mining’s Krone-Endora diamond mine in South Africa. As part of the agreement, Tiffany provided Diamcor with a $3.5 million term loan and a $2 million convertible debt debenture.
The off-take agreement between the two, dubbed a long-term strategic alliance, gives Tiffany’s diamond sourcing and polishing subsidiary Laurelton Diamonds South Africa a first right of refusal to purchase up to 100% of the production at “fair market value prices.”
Diamcor subsidiary DMI Minerals South Africa retains the right to market any rough and specials that are not purchase by Laurelton.
Diamcor acquired Krone-Endora from De Beers Consolidated Mines in February. The mine is adjacent to De Beers’ Venetia diamond mine.
The $5.5 million is provided to expedite the production and supply of rough diamonds from the mine, according to Diamcor.
The loan and Convertible Debenture are for five years, at a fixed annual interest rate of 7%.
Under the conversion rights of the Convertible Debenture, Tiffany may convert the $2 million, along with any accrued and unpaid interest, into class A common shares of Diamcor at CAD $0.75 per share.