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South African reserve bank keeps repo rate at 7 percent. PRETORIA (Reuters )2017-01-24 - South Africa's central bank kept its benchmark repo rate unchanged at 7 percent on Tuesday, in line with expectations.

Hi tozerk, no I don't think it's permitted under Business rescue proceedings. Post commencement finance should be raised solely for the purpose of re-establishing the business towards a viable concern & sincerely doubt that "post commencement financing may be channelled to pre-existing creditors whilst under business rescue. Conditional terms are set out in the placing. In addition to the above, the court ruling in favour of Business Rescue automatically affords protection against all lenders & trade creditors during business rescue proceedings. The practitioner by appointment is an officer of the court & is thus responsible to and acts on behalf of the judiciary to carry out restructuring for the purposes of returning the company to a viable trading concern in the shortest possible timeframe. Through consultation with affected parties/persons, the practitioner is empowered to, restructure, defer or even cancel existing obligations or contracts as reasonably deemed necessary (by application to the court) to achieve successful business rescue exit and with the view to place the company in the strongest position from which it is likely to return to long term profitability once the plan is properly implemented. This should be achieved with a view to the 'plan', that when voted upon by affected parties, is likely to receive approval towards implementation. The practitioner must act within the powers of the judiciary and in the best interest of business rescue whilst in full control of the company & is undeniably in a very powerful position over creditors but I don't believe even the best plan stands a chance in the absence of strong support of it's implementation, as it's only likely that when everyone pulls in the same direction to free the vehicle from the mud, they'll get to ride on the back of it. PS. Lonmin's rights issue was not made under terms of the business rescue act if memory serves correct.

Pleasure whogarth. The fact that negotiations are continuing is at least encouraging. I am however concerned that repair & remediation costs increase the longer talks stall. I'm sure it's also weighing on the practioner & BoD's minds. Patience & perseverance required...

whogarth & Tozerk, IDC loan details renegotiated 3 Dec 2015 Update as follows - Formal approval from IDC to reschedule the ZAR220 million loan (the "Loan") held by the Company's South African operating subsidiary, Lace Diamond Mine (Pty) Ltd ("LDM") (74 per cent. owned by DiamondCorp), as follows: * Ongoing capitalisation of interest previously payable in 2016 and no capital repayments until 1 February 2017 * Interest and capital repayments to now be payable on a quarterly basis from 1 February 2017 * Loan interest rate will increase from 2 per cent. plus South African prime per annum to 3.2 per cent. plus South African prime per annum, commencing 31 January 2016 * Loan principal and capitalised interest will increase from approximately ZAR258 million at the end of January 2016, to approximately ZAR311 million by 1 February 2017 (equivalent to c.£14.4 million at current exchange rates). http://www.lse.co.uk/share-regulatory-news.asp?shareprice=DCP&ArticleCode=za1a9shv&ArticleHeadline=IDC_Loan__4m_Proposed_Placing As of late at current exchange rates & capitalised interest the loan estimate = +- £18M. This is mostly attributed to fact that the Rand has strengthened substantially against all major currencies from mid 2016 lows as well as the devaluation of the £ due to Brexit. It is for that reason I suggested that likely x 2 conditions relating to the loan may be the cause of current contention as proposed in the practitioners restructured plan - a) Commencement date of the loan repayment & capitalised interest may be deferred further to a later date once stable revenues from the 500m level block cave commence. b) A restructured interest rate? Possibly restructured to revert back to the original loan terms i.e. S.A. Prime rate +2% (Such a restructuring proposal would effectively seek to annul previously amended interest rate terms (3.2%) the BoD's agreed to on 3 Dec 2015) ATB

Einvestein, for that matter Banksman's "year of the rooster" suggestion makes just as much sense. Lol. It's good to see humour & continuity prevail on the forum during even more trying times. I'm down to knuckles already, anyone have any nails left?

Correction to 09:46 post - revised interest rate... not date! Yes it would be a shame & very expensive lesson in administrative proceedings. Given the IDC's semi-state institutional purpose & agenda for promotion of national growth & employment, I think we'll see a resolve quite soon & understandably they're protecting their interests as any future investments in new projects is reliant on current investment returns. Will look in later, Cheers.

Ha, ha, sorry Tozerk. By using the term "Hair cut" I was referring to IDC "concessions" that need to be made in the proposed restructuring plan. I don't reckon the practitioner is out to scalp them but certainly a "hair cut" has been proposed in the form of either revised interest date and commencement of payment term?

Tozerk, not at all & by doing so they're likely to recoup a few cents to the Rand following liquidation. I really think that the current delay is more related to a "hair cut" the practitioner has proposed in the restructured plan.

Jaf, the resource, geology & processes tickle my fancy but corporate activity not so much and it really matters being right this time as it's all or nothing. MrPositve, I don't think the issue at hand relates to delaying LSE admission. Placing shares are issued via the BoD's existing authority as approved at the last AGM and just as admission was delayed to facilitate expressions of interest and again to give IDC & AMCU maximum time to consider conditions of the restructuring plan, it is possible to for the BoD's to delay admission further if required. I think the real issue relates to escalating costs resulting from further unrealistic delays as immediate remediation, repair & maintenance work required is on a short term budget. If left uncorrected for an extended period the rate of decay/damage increases & adds to cost which would fall outside of the phase 1 funding requirement budgeted, hence the strict timeline. Incidentally, whilst breezing through the act, I noted the following; Phase 1 funding (placing) in terms of the Act is considered as "post commencement financing" which as categorised places the funds in highest order of priority (above senior secured lenders) in the event liquidation or claims follow, irrespective of whether secured or not. The same applies with phase 2 funding which is an important consideration for investors wishing to participate should things progress to that stage. (Section 135 subsection (3)(b) refers). As a side, I recall my end Nov 2016 meeting with PL, he spoke very highly of the practitioner Mr D. Terblanche and the fact that the AMCU came on board so quickly, serves as testament of ability. The pendulum has swung to the IDC & we all look forward to a amicable solution. Monday update is a nail biter... ATB

Jaf & EvenKeel, keep those chins up. Points to consider - 1) The court after detailed reasoning would not have ruled on the commencement of Business Rescue if in fact the company's future could not be clearly restructured with reasonable prospects for returning a financially distressed company back to a viable concern, as well as... 2) the existence of circumstances confirming reasonable prospects to obtain a better return for creditors as opposed to the immediate liquidation of a company. Point 2 Guides affected persons/creditors on the way forward in their own best interests by way of adopting a reasonable & pragmatic approach to the practitioner's restructuring plan as opposed to liquidation prospects predetermined by the court as having a much less desirable result for all parties including the IDC. Put differently, the IDC's chances of recovering their investment & the likelihood of investment gains are best served through restructuring process. Placing oneself in the shoes of IDC investment manager/s, it is understandable that they would seek the best possible return at the earliest possible future date. I do think the latter, establishing an agreed date at which DCP is likely to be on firm footing and profitable once restructured and in a stable position to commence repayment of the loan & capitalised interest, could be a bone of contention. It is also conceivable that the practitioner may be seeking to restructure the revised interest rate that was agreed during rescheduling agreement Dec 2015. i.e.** Loan interest rate will increase from 2 per cent. plus South African prime per annum to 3.2 per cent. plus South African prime per annum, commencing 31 January 2016. Thus along with a yet to be agreed date to commence loan & capitalised interest repayments the interest rate agreement sought by the practitioner may require the IDC to agree to the original S.A. prime rate + 2%. **Note - In terms of Section 136(2) of the Act, a business rescue practitioner is entitled to suspend on any terms that is just and equitable, a contractual obligation either in full or partially or defer such contractual obligation relating to payment by way of a court order. Naturally, the best way forward is through mutual agreement rather than enforcement as it affords a vote to adopt the restructured plan with the strongest prospects of acceptance. Tozerk, yes the practitioner may delay proceedings by way of submission to the court if it is reasonably considered that by delaying proceedings it is likely to lead to a desirable outcome. ATB

3 Dec 2015 Update - Formal approval from IDC to reschedule the ZAR220 million loan (the "Loan") held by the Company's South African operating subsidiary, Lace Diamond Mine (Pty) Ltd ("LDM") (74 per cent. owned by DiamondCorp), as follows: - ** Ongoing capitalisation of interest previously payable in 2016 and no capital repayments until 1 February 2017 ** Interest and capital repayments to now be payable on a quarterly basis from 1 February 2017 ** Loan interest rate will increase from 2 per cent. plus South African prime per annum to 3.2 per cent. plus South African prime per annum, commencing 31 January 2016 ** Loan principal and capitalised interest will increase from approximately ZAR258 million at the end of January 2016, to approximately ZAR311 million by 1 February 2017 (equivalent to c.£14.4 million at current exchange rates). --------------------------- The events of Aug/Sep 2016 led to renewed discussions with IDC updated on 12 Oct 2016 the following refers - "Positive discussions have also been initiated with the Company's primary lender the Industrial Development Corporation of South Africa for restructuring the repayment terms of the Company's main project finance facility such that capital repayments are deferred from the first half of 2017 until such time as significant positive cashflow is achieved from the first 100,000 tonnes per month mined from the block cave on the 500m level. In the meantime, only interest would payable". - http://www.lse.co.uk/share-regulatory-news.asp?shareprice=DCP&ArticleCode=sep20ep0&ArticleHeadline=Project_and_Financial_Update Understandably further deferral & capitalisation until block cave revenue at full ramp-up 100K tons/month may well be a sticking point as current administration process & UK4 block production delay will most certainly push back block cave revenue to who knows when? Whatever the case in question, you can be certain that the IDC are not in the business of liquidating companies they're invested in and all parties will be working towards an acceptable compromise. Their mandate is the promotion of business and industry through investment support which primarily creates job opportunities and economic growth. http://www.idc.co.za/about-the-idc.html - "We align our priorities with government's policy direction and remain committed to developing the country's industrial capacity, as well as playing a major role in facilitating job creation through industrialisation".

IDC given Jan 30 deadline to save DiamondCorp’s Lace mine By David McKay - January 25, 2017 "The Johannesburg-listed diamond development firm said in an announcement today that the IDC had not yet agreed to certain conditions “with respect to various issues related to the board’s obligations” before the share placement". "Arguably the most potentially onerous condition on the placement has actually been met after DiamondCorp CEO, Paul Loudon, was able to extract an in-principle labour agreement with the Association of Mineworkers & Construction Union (AMCU) in respect of retrenchments and the payment of outstanding wages whilst the mine was placed on care and maintenance". Full article - http://www.miningmx.com/news/diamonds/28808-idc-given-jan-30-deadline-save-diamondcorps-lace-mine/

I've tried to have a look at Soapstone Investments (Convertible Bonds) listed on the JSE AltX for a related update in this regard but the last released was on 13 Jan re. Results of the Bondholders meeting. http://www.sharenet.co.za/v3/quickshare.php?scode=DMCCB Note. Access to JSE SENS (RNS) news on 'Sharenet' by non-members is only available for 7 days after release and historical releases can be found here if required - https://www.jse.co.za/current-companies/companies-and-financial-instruments/issuer-profile?issuermasterid=3804 ....Board's "obligations pursuant" to this placing - i.e. (Adjectives) "Proceeding after" or "following". MrPositve thanks for contacting PL. Just a couple of thoughts; a) Perhaps the IDC expect/require the Board's (current & overdue) compensation as indicated by PL to be compensated by way of equity (+warrants), should be subject to additional time & performance clauses which need to be met prior to [these] becoming exercisable? b) And/or the IDC perhaps requiring the BoD's to take short term future remuneration cuts of sorts to be compensated at a later date subject to meeting/achieving specific company performance & production criteria within a specified timeframes? c) Or perhaps relates to issues regarding crucial Board positions (interim/vacant) requiring to be filled by permanent appointments in the near term? i.e. Chairman, Chief Operating Officer (COO) and Independent Non-Exec. Director. See update 7 Nov - http://www.lse.co.uk/share-regulatory-news.asp?shareprice=DCP&ArticleCode=808h5lj4&ArticleHeadline=CORPORATE_AND_OPERATIONAL_UPDATE Following paragraph refers - Board changes and major shareholder support. "Concurrent with obtaining the financing facility ("Facility") with the Company's major shareholder, Rasmala plc ("Rasmala") (announced on 20 October), a number of board changes were instituted aimed at strengthening corporate governance and providing the Company's executive management team with additional support and financial management experience required to successfully implement its mine development plan. This included the appointment of Interim Non-Executive Chairman Chris Ellis and Rasmala's finance director, Neil McDougall as Non-Executive Director. Over the coming period the Board will consider the additional appointment of an independent non-executive director with specific financial and operational mining experience". In regard to the latter, I'm all for having key permanent people in place asap as past deficiency in this regard may have been a contributory factor. ATB

The Association of Mining & Construction Union ("AMCU") has been engaging constructively with management in an effort to reach a workable agreement, and we are pleased to say that such an agreement has been reached in principle today. This agreement remains subject to satisfactory documentation and final terms. Regrettably, Deloitte & Touche, the business rescue practitioner of Lace Diamond Mines (Pty) Limited has thus far been unable to reach agreement with the secured lender, the Industrial Development Corporation of South Africa ("IDC") with respect to various issues related to the Board's obligations pursuant to this Placing. ------------------------------------ Sanity prevailed & very encouraging a labour deal has been agreed in principal sooner than anticipated & very interested to know what issues the IDC have in regard to the boards obligations pursuant to the placing? A bit vague don't you think??

It's what happens when you window dress rather than appoint qualified staff that have reasonable assessment ability. The Chamber of Mines have been in continuous futile discussion with the DMR over the misinterpretation & inappropriate application of the act by inspectorate which has cost the industry $Billions in lost corporate revenue whilst exacerbating job losses during trying economic times incl. loss in State taxes. Chamber welcomes judgment by labour court To set aside Section 54 order at AngloGold’s Kopanang. Mineweb, Chamber of Mines 15 November 2016. -"The Chamber of Mines welcomes the recent urgent judgment handed down by the Labour Court setting aside a Section 54 order issued and confirmed by the mining inspectorate that effectively halted operations at AngloGold Ashanti’s Kopanang mine. The judgment provides greater clarity which will be useful to industry and the inspectorate. In particular, the judge pointed out that the Mine Health and Safety Act requires an inspector to objectively establish a state of affairs which would lead a reasonable person to believe that it may endanger the health or safety of any person at the mine, and contemplates an instruction that is proportionate to the infraction and the risk that it poses to health and safety".- http://www.moneyweb.co.za/mineweb/environment-and-sustainability/chamber-welcomes-judgment-by-labour-court/

Business rescue does work. The Mintails gold mining group case study. Dave Lake - 17 January 2017 Business rescue sometimes gets a bad rap. A look at statistics may suggest that the success rate in business rescue is low. This article explains why this is lies, damn lies and inappropriate statistics. When used for the right reasons, and when properly executed, business rescue achieves great results for those involved – creditors, employees, shareholders or us, the taxpayers. The magic is in the words ‘the right reasons’ and ‘properly executed’. Companies using business rescue for the wrong reasons – and there are many – are doomed to fail. Business rescue, as high court Judge Tsoka elegantly stated, is not for terminally ill companies – it is for ailing corporations which can become solvent again. Read the article - http://www.moneyweb.co.za/mybusiness/business-rescue-does-work/ I know many are dubious of the restructuring process. My biggest concern is a satisfactory labour agreement which in the greater scheme of things should come to a conclusion reasonably soon. Having visited the mine a year ago, both Lace & neighbour 'Voorsoed' are located in a rural area & to a great extent supports the livelihoods' of a small community as there is little else industrially to support income except for agriculture. Sanity will eventually prevail to benefit of the majority of the labour force. Once this hurdle is navigated the rest becomes substantially simpler to conclude. Keep your heads up folks! ATB

MrPositive, Feb/March the temp won't have reached boiling point yet so a good time to visit the region. I have 'em ice. I guess I was in too much of a rush last night. Please note as correction, I was referring to Section 54 stoppages and incorrectly posted 154. On that subject, the following Labour Court Ruling may be a tiny kick start in changing the way the DMR inappropriately applies Section 54 stoppages without prudent consideration to cost implications. Just to clarify, Section 54 entails complete halt to all operations as opposed to Section 55 which only requires a specific zone/area to temporarily cease operations due to serious safety concerns. Settling Section 54 - Will a more prudent application be adopted? Mineweb Terence Corrigan 22 November 2016 - "Judge van Niekerk’s ruling sets out a powerful challenge to this. It notes that the inspectorate ignored the imperative of proportionality. No evidence existed that the infractions identified posed a danger to the entire mine. He took strong issue with inspectors’ claims that proportionality was not an issue to factor into their decisions and noted that their responsibilities did not confer carte blanche on them to close mines without proper and specific cause". ‘The Mine Health and Safety Act has as its commendable purpose the promotion of a culture of health and safety and the protection of health and safety of those employees employed in mining operations. But that does not entitle those responsible for enforcing the Act to act outside the bounds of rationality.’ - Read the full article - http://www.moneyweb.co.za/mineweb/environment-and-sustainability/settling-section-54/ Let's hope the message sinks in & the inspectorate acts a little more rational in future before wielding the big stick.

Pg.3 Cont.... Quote - (2) To the extent that any remuneration, reimbursement for expenses or other amount of money relating to employment ‘became due and payable’ by a company to an employee at any time ‘before’ the beginning of the company’s business rescue proceedings, and had not been paid to that employee immediately ‘before’ the beginning of those proceedings, the employee is a preferred unsecured creditor of the company for the purposes of this Chapter. – (Key words – ‘became due and payable’ + ‘before’) It is conceivable November month end wages for monthly earners went unpaid and weekly earners (if any) would likely have received last wages on the day of the downpour Friday 11 Nov? Note that Business Rescue was filed Wed 16 Nov. My amateur interpretation is that; Creditor classification does not alter the amount of individual voting rights for the purposes of the BRP’s plan but rather seeks to prioritize the order of creditor pay out for debts & claims in the event that the rescue plan fails to be adopted. If we have any legal experts on the forum, your thoughts would be most welcome? PS. Read also - Part C. Rights of affected persons. Section 146: Participation by holder’s of the company’s securities. http://www.business-rescue.co.za/legislation/Section-146-Participation-by-holders-of-companys-securities.php#.WISxTXnau00 I apologize in advance but I'm late & haven’t bothered to correct grammar & spelling. All views & thoughts welcome! ATB

Pg.2 Cont... The following rather deficient & one sided article by the state broadcaster (SABC) on Nov 29th quotes DMR advisor stating that workers are yet to be paid monthly wages and goes on to say in the final quote which is particularly laughable/sad - "They must tell us in advance so that we can come together as stakeholders to find solutions to prevent instances of job losses,' adds Mabaso. http://www.sabc.co.za/news/a/dc374e804f24386aad6bed70ce873b7f/MineralundefinedresourcesundefineddeptundefinedlaunchesundefinedinvestigationundefinedintoundefinedKroonstadundefinedmineundefinedclosure-20162911 Is that just “Engrish” or are Management expected to have known in advance that an “act of God” in the form of 90mm downpour in just over an hour would halt production & vital revenue during ramp up for months? Of course the DMR actions played no role in obstructing earlier progress by issuing unfounded section 154 stoppages incl. an earlier major production delay via a blanket ruling on anti-roll back idlers for conveyor belts throughout the industry without consideration to adopting a time phased approach to offset cost & delay implications for non-revenue earning junior start-ups still under development. Apology, I’m venting & digress but the author earned 2016 Darwin award. I took a closer look at how legislation defines “affected persons” as well as the considerations applied to “employees’ rights”. "Business Rescue" Legislation defines "affected person" in Section 128 as - (i) a shareholder or creditor of the company; (ii) any registered trade union representing employees of the company; and (iii) if any of the employees of the company are not represented by a registered trade union, each of those employees or their respective representatives; http://www.business-rescue.co.za/legislation/Section-128-Application-and-definitions-applicable-to-Chapter-6.php#.WIJgLXnau00 Section 144 defines the rights of employees – In particular paragraph 2 sets out when an employee is considered to be a "preferred unsecured creditor" for the purposes of the chapter. http://www.business-rescue.co.za/legislation/Section-144-Rights-of-employees.php#.WIJhHHnau00 Cont....

I agree with CRB14 that labour negotiations will not be a simple hurdle to navigate but the clear warning provided in current updates is not simply for shareholders notice, it also serves as a message informing labour of the alternative should a deal not be reached. Re. “An agreement between the BRP and AMCU with respect to retrenchments and outstanding wages needs to be finalised in the very near term or it is likely that the Group will not be a going concern and will enter into insolvency proceedings”. - “The AMCU is the majority union at Lace" according to a previous unsuccessful AMCU strike action update Oct 2014 over management’s refusal to appoint 2 shop stewards. http://www.lse.co.uk/share-regulatory-news.asp?shareprice=DCP&ArticleCode=ra1s8hxk&ArticleHeadline=Industrial_Action_Lace_Mine The AMCU will certainly play a pivotal role in a labour agreement as the "majority union" but it does not necessarily mean they represent the majority of the total labour force at Lace. Their opposition namely the NUM (National Union of Mineworkers) will almost certainly have a strong presence amongst others as well as non-unionized workers. It would be interesting to know actual representative numbers? Two (2) factors that stood out during the 2014 AMCU strike - a) Management was publicly critical of the AMCU's self serving leadership at Lace. b) Productivity (tunnel metres progressed) by the remaining (non-striking) workforce increased 87% per man/shift during that strike. In terms of likely retrenchments, management will surely have formed a clear picture, distinguishing between productive & unproductive employees. Will AMCU leadership want to grind an old axe still fresh in their memory? I think it’s very likely which could lead to protracted negotiations. The phased funding approach places a limit to what’s available in settlement negotiations without limiting future wage remedial actions if required. If it sounds insensitive, it’s not intended but current circumstance (BRP) dictate that all jobs are at stake incl. the company’s future and that of all its creditors, equity & stakeholders should no agreement be reached. Continued...