Lucapa Diamond Co. announced yesterday (Wednesday March 4) it had received applications for a $2.8 million share placement to advance the Lulo kimberlite exploration program and for general working capital and corporate purposes. Investors looking to get in on the action which will issue 25,899,916 new shares at an issue price of $0.11 per share - representing a discount of approximately 13% to the volume weighted average price - must be a 'to sophisticated and professional investor' by today (March 5). Eligible shareholders will be entitled to subscribe for 1 new share for every 14 shares held (click on 'Read the full article' for details).
Eligible shareholders are those shareholders of the ompany who are registered as shareholders on the Record Date (9 March 2020) with registered addresses in Australia, New Zealand, United Kingdom, Singapore, Hong Kong or Germany. In addition to being able to apply for new shares under the rights issue, eligible shareholders will also have the opportunity to apply for additional new shares over their entitlement that are not subscribed for under the rights issue.
Lucapa intends to use the funds from the placement and rights issue to advance the Lulo kimberlite exploration program that aims to discover the hard-rock primary source or sources of the high-value alluvial diamonds Lucapa and its partners have been mining in the Cacuilo River valley for the past five years. This follows recent highly-encouraging drilling results announce recently. In 2019 and Q1 2020, the miner self-funded a US$12 million expansion of the alluvial mining operations, reducing its available free cash to also declare dividends during this period. This expansion, primarily involving the purchase of new mining fleet, is designed to deliver a 50% increase in carat production in 2020.