DCP.L Regulatory News (DCP)

16 November 2012

NOT FOR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR ANY OTHER JURISDICTION IF TO DO SO WOULD CONSTITUTE A VIOLATION OF THE LAWS OF SUCH JURISDICTION

DiamondCorp plc

JSE share code: DMC & AIM share code: DCP

ISIN: GB00B183ZC46

(Incorporated in England and Wales)

(Registration number 05400982)

(SA company registration number 2007/031444/10)

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

US$6,000,000 Term Loan in exchange for Lace Diamond Offtake Agreement

DiamondCorp, the Southern African diamond development and exploration company, is delighted to announce that it has reached heads of terms with Laurelton Diamonds, Inc., a wholly-owned subsidiary of Tiffany & Co. (NYSE:TIF) for a term loan of US$6,000,000 ("the Loan") in exchange for an Offtake Agreement for diamond production from the Lace mine in the Free State province of South Africa.

The Loan will be drawn down by DiamondCorp Holdings Limited, a wholly-owned subsidiary of the Company, in two equal tranches on 10 January 2013 ("First Funding Date") and 10 April 2013 ("Second Funding Date"). The proceeds will be advanced to the Company's 74%-owned subsidiary Lace Diamond Mines (Pty) Limited ("LDM") and used to complete the funding required for the 47 level block cave development at Lace.

The Loan will bear interest at 9% and must be repaid in full by the 8th anniversary of the Second Funding Date. There will be no payments of interest or principal for the first three years of the Loan, with interest accumulating during this period and added to the principal amount to be amortised and repaid. The Loan can be repaid early in part or in full without penalty.

The Loan is subject to the completion of legal due diligence and execution of binding legal agreements.

The Offtake Agreement will take effect from the First Funding Date until the end of the life of the mine. Subject to any purchases by the South African State Diamond Trader, the Offtake Agreement will give Laurelton Diamonds, Inc. the right to purchase, on commercial terms related to fair market value, production from the Lace Mine which meets the quality and colour standards required to yield Tiffany quality polished diamonds. Special stones and those diamonds which do not meet the Tiffany standard will be excluded from the Offtake Agreement.

Commenting on the Loan and the Offtake Agreement, DiamondCorp's CEO Paul Loudon said: "We are very excited to have secured such a prestigious funding partner as Tiffany. Their decision to provide project finance in return for access to a long-term supply agreement is testament to the quality of the Lace diamonds and an expression of confidence in DiamondCorp's development strategy."

Contact details:

DiamondCorp plc

Paul Loudon, Chief Executive

Tel: +44 20 3151 0970

SP Angel Corporate Finance LLP

AIM Nomad and Broker

Ewan Leggat/Laura Littley

Tel: +44 203 463 2260

Ocean Equities Limited

Guy Wilkes

Tel: +44 207 786 4370

PSG Capital (Pty) Limited

John-Paul Dicks

Tel: +27 21 887 9602

Russell & Associates

Charmane Russell/Marion Brower

Tel: +27 11 880 3924