Kimberley Diamonds Ltd. (ASX:KDL) announced that it has suspended operations at its Ellendale diamond mine.
Kimberley Diamonds Ltd. (ASX:KDL) announced that it has suspended operations at its Ellendale diamond mine. It has also placed Kimberley Diamond Company Pty Ltd., its subsidiary, into voluntary administration.
As quoted in the press release:
While KDC has seen strong processing results at Ellendale in recent months and has initiated a number of successful cost cutting initiatives, KDC revenues have been negatively impacted by lower recovered grades and lower size distributions and, as a result, lower prices have been realised. In particular, prices achieved at the auction held last week in Antwerp were significantly lower than those forecasted, resulting from a sharp, unexpected decline in the rough diamond market. As a result, KDC is unable to continue trading solvently and the KDC board has been left with no option but to place KDC into external administration.
The voluntary administration does not apply to KDL or its other subsidiaries which hold the interests in the Lerala Diamond Mine in Botswana or the Lomero-Poyatos project in Spain.
KDL has recently secured debt finance which allows KDL to commence the re-commissioning of the Lerala Diamond Mine, which, once re-opened, will provide KDL with significant revenue streams for the life of mine of approximately 7 years with significant potential for extension.