DCP.L Regulatory News (DCP)

17 March 2015

DiamondCorp plc

AIM share code: DCP & JSE share code: DMC

ISIN: GB00B183ZC46

(Incorporated in England and Wales)

(Registration number 05400982)

(SA company registration number 2007/031444/10)

("DiamondCorp", "the Group" or "the Company")

US$7 MILLION ROYALTY FINANCING

DiamondCorp, the Southern African diamond development and exploration company, is pleased to announce that its 74%-owned subsidiary Lace Diamond Mines (Pty) Limited ("LDM") has signed a term sheet with Acrux Resources (Pty) Limited ("Acrux") pursuant to which Acrux will advance the South African equivalent of US$7 million interest free to LDM (the "Advance") in exchange for LDM granting to Acrux a 3% net revenue royalty (the "Royalty").

The Royalty is conditional on completion of satisfactory legal, financial and technical due diligence by Acrux, consents from existing lenders to LDM, and satisfactory completion of legal documentation as is usual in a transaction of this nature.

The Royalty shall be payable on the first 12 million carats of diamonds recovered from the Lace mine and will be calculated on the net revenue received by LDM after the deduction of diamond marketing costs. The Royalty also incurs a 2% structuring fee on the Advance. After eight years LDM will have the right to repurchase the royalty at an independent valuation.

The proceeds of the transaction will be used by LDM to strengthen treasury at the operating company level and provide working capital cover during the commencement and ramp-up of operations at the Lace mine during H2 2015.

Acrux Resources is a Johannesburg-based resource focused investment management company providing innovative alternative mining finance solutions to small and mid-cap producers in sub-Saharan Africa and is the joint venture manager of the recently established alternative mining finance fund Ata Resources Fund 1.

DiamondCorp CEO Mr Paul Loudon said: 'The Royalty with Acrux will provide significant cash at the operating company level without the dilution of a large equity issue or additional debt at a time when we consider DiamondCorp shares to be trading at a significant discount to the underlying value of the Lace mine.

By creating an asset out of a small part of Lace's future cashflow and exchanging that for cash now, we significantly boost cash reserves while only incurring a small reduction in management's assessed net present value of DiamondCorp's 74% interest in LDM.'

Contact details:

DiamondCorp plc

Paul Loudon, Chief Executive

Tel: +27 56 216 1300

Euan Worthington, Chairman

Tel: +44 7753 862 097

UK Broker & Nomad

Panmure Gordon (UK) Limited

Dominic Morley/Adam James

Tel: +44 20 7886 2500

JSE Designated Advisor

Sasfin Capital (a division of Sasfin Bank Limited)Megan Young

Tel: +27 11 445 8068