Extreme thunderstorms in South Africa have flooded DiamondCorp's Lace diamond mine, forcing the company to shut down production for at least three months, writes DiamondCorp in a press release. The company has also requested a suspension of its shares from trading on both the AIM Market of the London Stock Exchange and on the Alternative Exchange of the JSE Limited pending clarification of its financial position. DiamondCorp is "investigating all options" as a result of the flood and its impact on the Group's financial position, and is consulting a business rescue practitioner for the Company's operating subsidiary, Lace Diamond Mines (Pty) Ltd.
The statement reads: "In the late afternoon of Friday, 11 November 2016, two extreme thunderstorms passed over the Lace Mine, dropping almost 90mm of rain in just over an hour. This equates to almost one-third of the mine's annual rainfall. This overwhelmed the mine's pumping systems and flooded the 310m production level to the hanging wall. In total, more than 10,000 cubic metres of water is estimated to have entered the mine through the open pit and access ramps. All personnel were successfully evacuated from the mine without injury. To pump the production level dry will take at least a week assuming no further material rainfall. However, once the level is dry no production will be possible in the short-term as the longhole drill rig which was operating at the time of the flood will need to be recovered and the electrics rebuilt. This could take up to 12 weeks from the time of recovery." The announcement comes after DiamondCorp investigated pursuing a takeover or merger opportunity to deal with an urgent funding need, a project it abandoned last week because offers on the table undervalued the business.