Diamcor Mining Inc. has announced a long-term strategic alliance, and closed a financing agreement with luxury jewellery retailer Tiffany & Co.
Tiffany & Co., together with its diamond sourcing and polishing unit Laurelton Diamonds South Africa and Diamcor unit DMI Minerals South Africa have entered into a strategic agreement regarding future rough diamond production from the Krone-Endora at Venetia project. Diamcor recently bought the Krone-Endora project from De Beers.
Under the terms of the off-take agreement, Tiffany & Co., through Laurelton, secured a first right of refusal to purchase up to 100 percent of the production of rough diamonds from Krone-Endora at fair market value prices to be negotiated and adjusted from time-to-time to reflect current market conditions.
DMI Minerals retains the right to freely market any rough diamond production and special stones (rough diamonds 10.8 carats or larger in size) which are not selected for purchase by Laurelton.
To expedite the production and supply of rough diamonds from Krone-Endora, Tiffany & Co. provided the company with an aggregate amount of $5.5 million in financing through its subsidiary, Tiffany & Co. Canada. The financing includes a $3.5 million term loan and a $2.0 million convertible debt debenture.
Diamcor President and CEO Dean H. Taylor said: "We are very pleased to have achieved these significant milestones for the company and look forward to a long and mutually beneficial relationship with Tiffany and Co. Our Company is well-positioned as one of the few diamond mining companies in the world with new near-term production potential at a time when rough diamond demand and prices are continuing to increase", he added.
Tiffany & Co Executive Vice President and CFO James N. Fernandez said, "We are excited about this transaction with Diamcor which is consistent with our ongoing vertical integration program to expand our sources of supply for diamonds that meet Tiffany & Co.'s high quality standards."