Currently, Merlin Diamonds is developing Merlin diamond mine project located some 100km south of the settlement of Borroloola in the Northern Territory.

Blumont will subscribe for 26 million shares in the diamond producer, marking approximately 10.92 per cent of Merlin Diamonds’ enlarged share capital, Blumont said.

Blumont Chairman Alex Molyneux said that the investment in Merlin Diamonds has provided Blumont with access to the second largest combined diamond resource and reserve in Australia.

"Precious stones was identified as one of our targeted business segments when we first embarked on our strategy to become Asia’s major diversified natural resources company," Molyneux added.

"This is our second investment this year in the mineral and energy resources sector and it affirms our commitment to forge ahead with new deals that we think have good growth potential and fit in with our overall strategy."

The subscription proceeds will be used for the further development of the project, the only diamond mine in Australia’s Northern Territory.