Lucapa Diamond Company (ASX:LOM) - CEO, Stephen Wetherall
CEO, Stephen Wetherall
Source: Miningmx
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Lucapa Diamond Company (LOM) has announced a rights issue to raise up to $5.25 million to see it through the COVID-19 pandemic
  • The company has reduced operations at Lulo in Angolo to essential work only to ensure the health and safety of staff
  • In Lesotho, Lucapa is implementing a care and maintenance program at Mothae due to a disruption in the flow of supplies and services from South Africa where a lockdown is in place
  • Funds from the rights issue will be used to preserve these mining assets until normal operations can resume, as well as fund the search for the primary source of alluvial diamonds at Lulo
  • At the end of the March quarter, the company had approximately $2.7 million in cash, enough to fund operations for one quarter
  • The company is currently in discussion with its financiers with the view of restructuring its loan facilities
  • Company shares were unchanged at market open, trading for 4.9 cents each

Lucapa Diamond Company (LOM) has announced a rights issue to raise up to $5.25 million to see it through the COVID-19 pandemic.

In Angola a state of emergency has been declared and, while mining activities have been offered an exemption from the lockdown measures, the company has reduced operations at Lulo to essential work only to ensure the health and safety of staff.

In Lesotho, Lucapa is implementing a care and maintenance program at Mothae due to a disruption in the flow of supplies and services from South Africa where a lockdown is in place.

Funds from the rights issue will, in part, be used to preserve these mining assets until normal operations can resume. In addition, the funds will contribute to exploration for primary kimberlite sources of the alluvial diamonds recovered at Lulo.

Capital Raising

In March Lucapa Diamond announced a rights issue to raise $3.9 million, however, it later withdrew the rights issue due to market volatility. Now, the company has announced a rights issue to raise up to $5.9 million.

This will occur on a one for five basis at five cents per share with one free attaching option priced at 10 cents each. If fully subscribed approximately 105 million new shares will be issued and the same number of new options.

The March quarter

At the end of the March quarter, the company had a cash balance of approximately $2.7 million in cash and 4780 carats of diamonds in inventory at Mothae. This provides Lucapa with a cash runway of one quarter.

As of March 31, 2020, the company had also drawn a total of $22.8 million from three loan facilities. Lucapa is currently in discussion with its financiers with the view of restructuring its loan facilities.

In addition, the company has also put in place measures to cut overheads during the pandemic. At its Perth office, contractors and staff have taken a 60 per cent cut to fees or emoluments. Non-executive directors Miles Kennedy and Ross Stanley will also waive their fees until further notice.

Company shares were unchanged at market open, trading for 4.9 cents each.

LOM by the numbers
More From The Market Herald
ActivEX (ASX:AIV) - Managing Director, Mark Derriman

" ActivEX (ASX:AIV) intersects up to 34.6g/t gold at Mt Hogan

ActivEX (ASX:AIV) intersects up to 34.6 g/t gold from the Mt Hogan historical mine within its…

" BHP’s (ASX:BHP) FY22 best annual report in a decade, record dividends

Australia's largest mining company BHP (ASX:BHP) reports its best annual report in more than a decade…

" Corella Resources (ASX:CR9) commences sonic drilling at Tampu, WA

Corella Resources (ASX:CR9) has commenced its sonic resource definition drill program at its flagship Tampu kaolin…
The Market Herald Video

" Horseshoe Metals (ASX:HOR) kicks off first round of drilling at Glenloth Goldfield, South Australia

Horseshoe Metals (ASX:HOR) has kicked off a maiden reverse circulation drilling program at its Glenloth Goldfield…