Blumont to invest A$1.95m in diamond miner

Blumont Group will be investing about A$1.95 million (S$2.2 million) in an Australia-listed diamond miner, its first foray into the precious stones sector.

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Blumont to invest A$1.95m in diamond miner

Jacquelyn Cheok
18 Februarya 2014

Blumont Group will be investing about A$1.95 million (S$2.2 million) in an Australia-listed diamond miner, its first foray into the precious stones sector.

Yesterday, the products sterilisation company turned mining holding company said it will subscribe for 26 million shares in Merlin Diamonds - or about 10.92 per cent of its enlarged share capital - at A$0.075 each. Merlin Diamonds shares were last traded at A$0.081 apiece yesterday.

“With the subscription, the company aims to establish a position in the diamond industry and more generally, to strengthen its position in the mineral and energy resources industry,” Blumont said.

Proceeds from the subscription will be used to develop the Merlin Diamonds Mine Project, a diamond mining project located in Australia’s Northern Territory. With a combined mineral resource and ore reserve of 30.1 million tonnes representing a total contained 7.2 million carats, the project is the second-largest combined diamond resource and reserve in Australia, said Blumont.

In January, Blumont made a takeover bid for Australia-listed mineral miner Genesis Resources. It offered 5.3 Blumont shares at an implied price of 7.19 cents apiece for every two Genesis shares, which would give Genesis shareholders a 16.48 per cent stake in Blumont if the offer is accepted. The aggregate consideration was a maximum of about A$32.5 million.

In October last year, Blumont was among three penny stocks which lost about S$8 billion in market capitalisation, following a dramatic crash in their share prices.

Blumont shares ended 0.3 cent higher at 6.9 cents yesterday.

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