LONDON (Alliance News) - Paragon Diamonds Ltd shares were suspended on Monday morning ahead of the company issuing a statement on its financial position, which currently looks precarious.
Paragon said it currently has limited working capital and until a funding package is agreed, there is "material uncertainty" about its financial position.
Paragon remains in talks with potential financing providers in order to secure funding to complete the acquisition of the Mothae kimberlite resources in Lesotho, provide development funding for the Lemphane project, also in Lesotho, and repay short-term debts, including a GBP500,000 loan due on November 18.
If that loan is not repaid within five business days, Paragon will be in default, and the lender will be able to demand immediate repayment of the loan at 120% of the outstanding amount, or the lender may convert the outstanding loan into shares in the company.
The stock was last quoted on Friday at 3.98 pence, compared to its 52-week range of 3.25p and 7.00p.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
