IDC has agreed to make a seven year term loan of $33.6m available to Lace Diamond Mines (Proprietary).
The funds will be used for the underground development of Lace mine and the purchase of mining equipment.
DiamondCorp chief executive officer Paul Loudon said that the key driver for management in seeking funding for the project development has been to find the optimum financing method which is the least dilutive for shareholders of the company.
"Therefore, we are delighted that we and our Black Economic Empowerment ("BEE") partners have been able to agree in principle a debt financing proposal from the IDC to provide over 98% of the estimated capital required to establish a block cave development on the 47 level at the Lace mine," said Loudon.
"This is a significant milestone in DiamondCorp’s transition from developer to producer and we welcome the support of the IDC in funding this potentially long-life diamond mine in the Free State Province."
The latest estimate for the total cost of development at Lace mine located in South Africa’s Free State Province is ZAR384m ($46.3m), but with revenue expected from diamond sales after 18 months, the peak funding requirement is forecast to be ZAR285m ($34.3m).
The transaction is subject to completion of regulatory approvals and is expected to be finalised in July 2012.
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