PRG.L Regulatory News (PRG)

Paragon Diamonds Limited / Index: AIM / Epic: PRG / Sector: Resources 9 December 2014 Paragon Diamonds Limited (`Paragon Diamonds' or the `Company') Result of General Meeting Paragon Diamonds Limited, the AIM quoted diamond development company, ispleased to announce that all resolutions were duly passed at the Company'sGeneral Meeting held earlier today. Paragon Diamonds' CFO Simon Retter said, "I am delighted to announce that theproposed buyback and cancellation of 63,000,000 Ordinary Shares, representing18.9% of Paragon's entire issued share capital, from Lanstead Capital L.P. hastoday gained shareholder approval. The transaction is in line with Paragon'smanagement focus on generating significant value with minimal dilution forshareholders as we gear up to commence Stage 1 production of large high valuestones at our flagship Lemphane kimberlite diamond project, in Lesotho, in Q12015 subject to financing." "Notably, our Chairman Philip Falzon Sant Manduca has shown significant supportfor Paragon by way of a £1.3 million loan from his private equity investmentcompany Titanium Capital (as announced on 11 November 2014) to complete thistransaction and equity swap. His belief in Lemphane as a source of large highvalue diamonds for years to come, and indeed Paragon as the platform from whichto build a leading vertically integrated and cost efficient, diamond house iscompelling. With this in mind, I believe the on-going support of Titaniumincreases Paragon's options with regards to debt funding Stage 1 production,which will help ensure existing shareholders' exposure to the considerableupside on offer is maximised." **ENDS** For further information please visit www.paragondiamonds.com or contact: Philip Falzon Sant Paragon Diamonds Limited +44 (0) 20 7182 1920ManducaSimon Retter Paragon Diamonds Limited +44 (0) 20 7182 1920 Edward Hutton/Gerry Northland Capital Partners +44 (0) 20 7382 1100Beaney Limited (Nominated Adviser) John Howes/Charles Northland Capital Partners +44 (0) 20 7382 1100Laughton Limited (Sales and broking) Felicity Winkles St Brides Media and Finance Ltd +44 (0) 20 7236 1177Frank Buhagiar St Brides Media and Finance Ltd +44 (0) 20 7236 1177 Notes Paragon Diamonds has a pipeline of projects in Lesotho, Botswana and Zambia,the most advanced of which is its Lemphane Kimberlite Pipe Project in Lesotho,located close to the world class Letšeng mine, Lesotho's largest diamond mine.Lemphane is the last known kimberlite to be developed in Lesotho. Among thestones recovered in the Company's 2013 bulk sampling programme were severallarge high value stones of up 8.9 carats in size and individual diamond valuesin excess of US$2,400/ct have been achieved, demonstrating the potential forLemphane to hold large and valuable diamonds. The first of a two stageproduction programme is currently expected to commence Q1 2015 (subject tofinancing) which will further define the resource at Lemphane. As increasedtonnages of kimberlite are processed the proportion of larger diamondsrecovered will improve, increasing the average value of diamonds recovered atthe project, as was the case at Letšeng. Stage 1 production will cover a two year period during which approximately 1 Mtof kimberlite will be mined and processed out of the currently estimated 48.6Mtof kimberlite (to 350m depth) at the site, using a 75 tonne per hour processingplant. The Company is targeting 20,000 carats during Stage 1 production with anestimated minimum value of US$930 per carat that is expected to generaterevenues in excess of US$9m per annum. Cash flow will be reinvested to furtherdevelop Lemphane and complete a bankable feasibility study, a 3D geologicalmodel and a substantial inferred resource ahead of commencing the Stage 2production phase. Stage 2 will see production ramped up to 3Mt/year with peakproduction expected to hit 65,000 carats per year of high value diamonds. It is the intention of the Company to become a fully integrated diamond companymaximizing the margins gained from being exposed from the mining to selling ofdiamonds.