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Stellar Secures Loan for Work Before Diamond Sales Begin
Dec. 11, 2014 09:31AM PST
Diamond Investing
Stellar Diamonds plc (LSE:STEL) has secured US$2 million for its immediate working capital needs as it gets ready for diamond exports and sales from its Guinea operations.
Stellar Diamonds plc (LSE:STEL) has secured US$2 million for its immediate working capital needs as it gets ready for diamond exports and sales from its Guinea operations. The diamond development company exported the first diamonds from its 75-percent-owned Baoulé project this month.
As quoted in the press release:
An initial tranche of US$250,000 (‘Initial Tranche’) will be available for drawdown immediately, followed by a second tranche of US$250,000 (“Second Tranche”) which is expected to be drawn down as soon as practicable thereafter. Further tranches may be available if mutually agreed by the Company and Yorkville and subject to certain conditions being met. Each tranche drawn down by the Company is subject to an arrangement fee of 7% of such tranche and interest at 10% per annum.
The Initial and Second Tranches are expected to be repaid in cash, on a monthly basis over 10 months, with first payments commencing three months after the date of the first drawdown.
Chief Executive Karl Smithson stated:
The Company is at an inflection point with the first sale of diamonds from our Baoulé Project expected this month and further regular exports and sales expected to occur every 2 months thereafter. This Loan Facility provides a source of bridge finance to support the working capital and operating requirements of the Company whilst we begin to generate regular cash flows from Baoulé. There is no minimum draw down required under the terms of the SEDA and the Board do not currently anticipate that it will be necessary for the Company to use the SEDA facility. Neither the Company nor Yorkville is under any obligation to agree to any bridging loan beyond the two tranches of US$250,000 each.