Member Info for Valency

Believe me, I understand you concerns/views! I am not in for a sixpence and have as much right to be p#ssed off as anyone else. Foremost on my mind ahead of the meeting was to keep an open mind and to remain dispassionate & unemotional if I'd hoped to make an honest assessment and cut through the cr@p for all our sakes. It was not a walk in the park & there were some real moments I can assure you, especially regarding my view of Rasmala and the term "Sharia compliant". It took an act of God to snub those aspirations & they are no longer in the driving seat. Thankfully, DiamondCorp along with the "appointee" is and [they] will now have to fall in the back of the queue well behind all major creditor decisions and the appointee's restructure plan. PL was very happy with the acceptance & appointment of Daniel Terblanche of Deloitte & Touche. Apparently a no sh*t guy with a track record that feels very strongly in terms of a successful restructure and positive outcome. Under the act, they/he are under no obligation to accept the appointment without the business indicating clear continued future viability. The time for emotionality ended along with the ensuing damage from the freak storm the administrative protection process being confirmed. It is very important to distinguish between a failed business and one that encountered an uncontrollable temporary setback affecting viable future profitability. The latter conditions must be present & applicable in order for a business to qualify for business rescue. PL was adamant that shareholders will be protected and if successfully restructured, would be better off under a substantial debt reduction & stronger equity holders rather than multiple creditors. Traderman123, I don't underscore your feedback in fact I agree with much of what you stated in terms of poor contingency. I do differ though in the view that PL is missing in action & abandoned shareholders and that there is no further drive for this to succeed for all current stakeholders? Crawling homeward in the traffic allowed some time to reflect and something that struck me was PL's immediate response to my request for a meeting and the fact that he juggled his schedule to accommodate. It speaks volumes & let me assure you, I have no doubt as to his continued drive for this project. I was very blunt when I asked if he felt that he had the remaining energy to see DCP succeed for current stakeholders! His response was without hesitation & certainly smacked of someone with plenty of gusto. ATB

Continued... My conclusion is that PL & BoD’s embraced the “fortuitous” opportunity when it presented itself and He strongly anticipates a successful outcome. He was devoid of excuses, open, honest and candid and never once avoided any line of direct questioning. Along with that I could see fatigue and got a clear sense of his personal acceptance of responsibility & heartfelt regret for failing to fund adequately as well as that resulting in the demise of EW & the CFO. In short I feel cautiously optimistic after the meeting with the understanding that there is much that needs to be done to satisfactorily conclude the administration process. A broad spectrum was discussed & I will follow up with more later in regards to Rasmala whom have had to agree to concessions under the current formal “administration” as well as some info regarding water levels which are under control, current diamond market developments and the subject of contractor rates. Thanks to Alligan, BobZim, J_b1000 & Traderman123 for your valued feedback and the ammunition you provided me with. ATB

Continued.. The resource is intact not defunct and the flood caused a 12 week delay not a total collapse which is important criteria for protection acceptance. (Semantics - Failed producer vs delayed production) PL explained that DCP as the largest creditor is the key to leading & directing negotiations and you will note that the JSE listed (DMCCB) Soapstone CB’s were only suspended 2 days ago due to on-going positive negotiations. http://www.sharenet.co.za/v3/sens_display.php?tdate=20161121124500&seq=24 As previously updated, the IDC negotiations are also on good ground. Laurelton (Tiffany) are an ally & considered additional funding but as a result of huge write-downs in Sierra Leone further project investments were disapproved and according to PL they are positive & receptive toward a restructure. The aim & most likely scenario is to restructure debt to equity which if successful, could result in shaving off up to 20M ($/GBP??) debt and would see former creditors converted to equity holders and such substantial debt reduction & restructuring if successful, would outweigh perceived negative share dilution. It seemed clear that the allowable 60day process will play out in full and only once a successful restructure is accomplished and concurrent with this period, a strong contingency long term funding (+-GBP5M) will be structured (most likely rights issue) through all ordinary shareholders (both existing & newly restructured) which is intended to see Lace through to production. Incidentally, I enquired about the share price at suspension and a possible rights issue at premium? Clarification from the London Stock Exchange was received verifying the current share price as 2.05p close. The late trade indicated after suspension was allowed due being an equity swop, CFD or option but has no effect on the close? PL indicated that should the restructure conclude successfully, a “rights issue” at substantial premium could be anticipated as there would be no further conditions justifying the current share price. My advice to current shareholders is to plan accordingly should proceedings succeed and I will be participating should such a rights issue arise after favourable restructuring. Continued...

G’morning & trust I’ve not kept everyone in suspense (no pun intended) for too long. As briefly mentioned late last night, we met for an hour and covered a lot of ground in a one on one rather candid discussion after brief introductions. I previously visited Lace a year ago but PL was absent at that time so it was our 1st direct encounter apart from past email communication. ‘EvenKeel’, I figured an open minded approach would serve best but was also more than ready to bat after more than 3 years of patience so asked PL to briefly explain the current situation and that I would interject when I required additional clarification. He stated that as we are in suspension and a formal administration process is underway, every subject was pretty much open to discussion & that there was only one aspect which he did not want relayed or in print. After listening intently & exchanging thoughts on the matter, I’m in agreement and will respect that request. I mention this only to demonstrate that his entire demeanor portrayed an open book and one of total acceptance & responsibility. I stated; the “tech report” clearly outlined that the high risk point would be reached when blasting of the initial slot & trough intersecting with old upper workings and felt the BoD’s had put shareholders at unnecessary risk with tight funding? He conceded that marginal funding was not an oversight & in hindsight, sailing too close to the wind was a strategic BoD’s error in an attempt to keep equity dilution at a minimum admitting that the CFO projection was always spot on (not at fault) when cash would run out but EIIB insisted on her and EW’s departure. Should the restructure be successful which PL seems very positive it will, the error is one PL & the BoD’s will not repeat. Importantly, we discussed “administration” (business rescue) under S.A. law versus “liquidation” and a clear distinction should be made. It is a powerful business tool allowing for creditor protection. J_b1000’s feedback provides good insight in this regard & I suggest folks read it again in conjunction with Alligan & BobZim posts! Out of pure circumstantial luck, DiamondCorp is the largest creditor (Soapstone & UK CB’s) having had to (fortuitously) structure this way as a result of 2008/9 financial market crash & tight liquidity. An “act of God” freak storm (as 1 of our posters stated) opened this avenue of protection perhaps suggested by DCP’s astute legal advisor? Liquidation was quite possible leading up to the downpour which ironically presented relief to seek protection and a restructure. The opportunity to file for protection was embraced & could not have taken place if the storm hadn’t occurred. The resource is intact not defunct and the flood caused a 12 week delay not a total collapse which is important criteria f

I apologise for reporting back so late but peak hour traffic between Jhb & Pretoria was nasty whilst driving home followed by a bad electrical storm (not much rain) which rendered the network in my location offline. Very briefly as it's late, we met for an hour which I found to be time well spent & certainly worth the effort. Much of what was stated by einvestein, BobZim & J_b1000 was corroborated by PL and considering that he was absent at the GM (led by CE) would mean that it was either well rehearsed by all parties or an accurate rendition of the current state of affairs. If/when time allows, I will endeavour to expand tomorrow and without any intent to create false hope, I left with an ulcer in remission for now. Lol.

Meeting arranged 3pm this afternoon in Jhb. I anticipate arriving back late so will update you when able. ATB

Hi einvestein, just arrived in J'burg & will contact PL to arrange a meeting if he's back in the country? I think it will be pointless to obtain a rental and drive all the way to Lace unless I could see him personally which I am more than willing to do. Will keep you posted... Rocbottom, if you're still invested & want to accompany me, let me know via my email or LSE?

Alligan & BobZim aka "small caps", many thanks for your selfless effort and valued feedback. It's late my side of the equator and I have an early morning road trip to a few one horse towns so not sure if I'll be able to get online for the next 2 days but will endeavour to do so in response to your GM notes. Hammer44, I'll answer if I may. New storage dams were built 18 - 24 months ago and water from the mine is pumped into those as well as the slimes dam for use in the processing plant. The slimes dam level has to be carefully managed during rainy season thus does not have huge extra capacity especially during the rainy season but yes, pumped water from the mine is stored for utilisation. ATB

Hi Banksman, me neither tbh but I would argue that the sale would go ahead and the proceeds placed under the protection of the appointed administrator because should a business rescue plan fail, the total inventory would be sold anyway. What I do find interesting is that the GM required vote went ahead after formal notification of business rescue proceedings as the 2nd tranche drawdown could not go ahead until all 3 resolutions were approved if one reads the circular? Perhaps Alligan will be able to shed some light on this but I think a further update should be anticipated. If the 2nd tranche drawdown goes ahead it may signify Rasmala is satisfied with current proceedings and the future of LDM under business protection until long term funding Is arranged and production resumed? The suspension also stops Rasmala from manipulating the share price and if the CB is converted they will receive the daily wheighted average price from 20 Oct less 30% discount if memory is correct. If business rescue fails it will remain suspended and I guess if the suspension is lifted then it will only be good news related to financial security and production resumption.

The BoD's are following the required legal procedure under the current non productive situation and longer term financial insecurity. Mr Hulme Scholes will now be proving his worth - http://malanscholes.co.za/corporate-commercial-2/ Perhaps Alligan will be able to gain some info from the GM and look forward to his feedback.

The broker service I use still indicates 2.05p suspension price which is the same as the London Stock Exchange indication - http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GB00B183ZC46GBGBXAIM.html?lang=en It's interesting to see how easily some folks simply throw in the towel. It's a trading suspension pending clarification of the financial position. The short term has been sorted for now and in excess of 5Kcts are set for tender at month end to further assist the financial position which given the number of stated "specials" and +8ct stones as at 12 Oct should net at least GBP900K. A further months production prior to suspension took place with some production allocated to Rasmala and the remainder adding to DCP inventory. As appropriately, diamonds don't dissolve and there is $1.5B in ground. The Lace mine is a hard asset not an IT bubble and just as many other shareholders, I reiterate my financial support to ensure the company future and that of my investment. Thankfully PL has taken many blows on the chin to progress to this advanced stage and there are many "Captain Hindsight's" offering opinions rather than proposing solutions or support. Alligan, thanks for taking the taking the bull by the horns at the GM and I reiterate my support. I am also wiling to visit Lace to chat directly with PL sometime after the 21st if he is back in S.A. after the GM. I am currently still in the Cape but anticipate travelling to Jo'burg next week before returning to the middle east 1st Dec. ATB

INTEREST PAYMENT ON CONVERTIBLE BOND Bondholders of the Soapstone Investment Convertible Bond are hereby advised that the DMCCB convertible bond will commence trading ex-interest from the close of trade on 7 December 2016, with respect to the interest coupon period that commenced on 14 September 2016 and that ends on 13 December 2016. The interest amount to be paid on 14 December 2016 will be ZAR349.04 for each ZAR10,000 of principal amount. The next interest coupon period will commence on 14 December 2016 (inclusive) and end on 13 March 2017. http://www.sharenet.co.za/v3/sens_display.php?tdate=20161111100000&seq=16 That's roughly GBP80K utilised of the short term Rasmala funds. Bond holders were not updated on the suspension or any material change affecting future quarterly interest payments.

Ghost miners from the past really are working the mine, aren't they? It's an interesting twist - Value remains in the ground and as Cliveas stated, they will have to step up to the plate to get the funding sorted pretty soon or sell the mine! The terminated formal sales process established the following and some proposals were considered opportunistic/undervalued - "Such approaches included an early stage non-binding indicative cash proposal at a substantial premium to the share price at the time, which remained subject to, inter alia, amendment and due diligence". Pumps are capable of double normal capacity & will take a week without further freak storms & up to 12 weeks to rewire drill rigs once recovered. Time to bring it to all shareholders as per Alligan's proposal in the form of a "rights issue" to claw back value? E.g. 1:5 @ premium 3p (95.7M new shares x 3p) would raise £2.871M. Rasmala have their 5Kcts collateral so thinking out loud; A vote against the proposal to issue further shares in terms of the Rasmala facility may now be in shareholders best interest to retain some value followed by an immediate "book build" exercise directly with shareholders or rights issue proposal in order to claw back until ops can resume? I don't believe PL should even consider approaching Rasmala again as they've already displayed their true colours and I prefer being kissed before getting screwed. Perhaps an "act of God" is what was needed to send Rasmala/EIIB on their greedy way & level the playing field for all ordinary shareholders to claw back value and secure the company's future?

Jaf, apology for the late reply. Sole focus is on the Rasmala/EIIB deal & drawing down the 2nd trance means that pi's will pay the full price of this expensive "ransom" deal. Labelling [it] Shariah-compliant does not make it ethical. EIIB never once participated in rights issues/fund raising hence their "old money" (original investment) was substantially diluted especially over past 18months and they are using current circumstances to hold the company at ransom to claw back much more than their original investment + a substantial bonus while they suppress the share price.... That is the sole overriding negative in the update. I agree with Daison - The grade has improved from previous July/August 25cts/100tons to current month 29cts/100tons as mining moves into less diluted K4 and ground is stabilising as mining progresses away old workings. Monthly tonnage remained slightly ahead of planned as at the update and the Rasmala 5K carat collateral was completed at the end of the day shift. The next sale over 5K carats was announced to be completed end of Nov. The majority of that tender parcel will already be in Antwerp thus current inventories incl. Rasmala collateral should be above 10Kcts. If memory serves correct July/Aug highly diluted & low grade only recovered 1 x stone +8cts and the following was also totally overshadowed by the funding crisis (13 Oct) - "Stones recovered have been up to 19.4 carats in size, with a pleasing number of gems larger than 8cts, including a 10.6ct clear gem". - A further months production recoveries since 13 Oct will have added to the improved SFD of +8ct stones stated above. Operationally the news has been positive but it's being continually overshadowed by the Rasmala bailout.... I'll try to look in later. ATB

Alligan, thanks for the effort & willingness to propose at the GM. I've barely unpacked my bag & repacked again as I leave for J'burg tomorrow morning. Unfortunately I have a lot to attend to before flying to Cape Town on the 6th but should be back in J'burg on 22nd. If all goes according to schedule, I might be able to pay a visit to PL at Lace sometime between 22nd and 30th Nov? Will keep you posted.....

Apology Alligan, meant to be addressed to you!

Einvestein, very proactive & worth a proposal. Put me up for 260K total. (60K on JSE for Grandkids + 200K on Aim) A friend (shareholder) would be interested in 250K on Aim. Arrived back home from London late last night so I won't be able to attend the GM unfortunately. Thanks for the proactive effort!!

Correct Einvestein, Aluwani Capital Partners own 75% of the Soapstone CB's (JSE) with the option (DCP's discretion) to convert to equity around 5p/share (ZAR equivalent) if memory serves correct?

Last paragraph was cut off.... I’m travelling this afternoon and may be in the UK from Thursday so perhaps I could attend the GM? If so, I will most certainly advise. ATB

2. Cont.... "Volume" as discussed with Banksman earlier this year is important, not only in terms of quantity stones recovered but also to establish actual average SFD. In addition, high volumes answers many questions around "specials" and may also indicate in which zone/s or facie/s "pinks" & purples as well as type IIA 's are concentrated or whether they are relatively evenly distributed throughout the pipe? Furthermore, the 1.08ct Purple Type IIA sold ($6363/ct) earlier this year is very rare because purple (hue) stones don't fall within the Type IIA concentrated colour range, rather they are predominantly Type I. Click on download pdf & refer pg. 132 Fig. 5 http://www.gia.edu/gems-gemology/summer-2002-grading-natural-pink-diamonds-king Note that Type IIA’s however rare, when found are more concentrated in the “warmer” red (hue) of the spectrum in terms of colour stones. These are questions which only high volumes (tonnage) are likely to answer apart from the fact that it would improve the odds of finding a sizeable colour stone. A single 6ct - 8ct Type IIA Fancy Vivid Pink would solve DCP’s current “long term” financial position and at least production has resumed in high grade K4 albeit at half full rate so there is always a chance of a special find at this time. These are but a few remaining questions that when answered through volume (tonnage) could place Lace in a much more valuable space than the current resource estimate. I do however think that production to date has largely confirmed grades, a higher minimum SFD, overall quality of stones & past history of “pinks” & “purples, which the latter in terms of recent production confirms Lace as a consistent quality colour stone producing pipe and is value additive in its own right due to scarcity & uniqueness, not to mention the higher $/ct value they achieve and add to the resource statement’s conservative base case estimate as neither “specials” nor “colour” stones are included at this time and are wholly additive. There are a finite number of kimberlite pipes remaining containing dwindling resources & no new major pipes have been discovered in the past 20 years. Ghacho Kue is estimated as 10th largest pipe and is coming on stream 2017 but DeBeers recently closed Snap Lake mine after only 2 years. Rio abandoned the Bunder project which was the only recent discovered midsized pipe and more significantly their 100% owned Argyle mine (world’s largest by volume) is anticipated to commence closure at the end of this decade having extended mine life through underground operations. After initial “expressions” of interest the BoD’s moved to an “offer period” and it only requires more than 1 interested party for a bidding situation to ensue. I’m travelling this afternoon and may be in the UK from Thursda