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DiamonEx suspends trading of shares again

Staff Writer
Troubled junior miner, DiamonEx has requested for another suspension of trading on its shares as it tries to wriggle out of a financial crisis.

Following the placement of DiamonEx Botswana under judicial management in January, the company suspended the trading of its shares on the Australian Securities Exchange, AIM and Botswana Stock Exchange (BSE) until yesterday. A statement released by the company secretary Paul Crawford said yesterday that DiamonEx's shares will remain suspended from trading on the ASX until the company board confirms its plans for the future.

"The Judicial Management Order which has been granted to DiamonEx's wholly owned subsidiary, Diamonex Botswana Limited, remains in place following the court hearing regarding the order which took place on Friday, 27 February 2009.  A further hearing regarding the Judicial Management Order has been set down by the court for Friday, 27 March 2009.   DiamonEx will update the market once further details of the plans regarding Diamonex

Botswana Limited have been set by the judicial manager and agreement reached with its lenders," Crawford said. 

Choked by the gloomy prospects in the diamond industry and poor sales late last year, DiamonEx Botswana was placed under voluntary judicial management by the High Court leading to the suspension of the trading of its shares on the BSE.

DiamonEx was granted the

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permission to be placed under judicial management by the High Court  as it needed to review its financial position  citing cash flow problems as the main reason following last October's disappointing results for its first sale of 10,613 carats of diamonds from its Lerala mine. The sale only managed to achieve an average price of US$20 per carat for the whole run of the mine parcel, much less than a preliminary valuation of between US$48 and US$58 per carat.

Despite receiving a P10 million  bailout from the government in November last year in a bid to keep the Lerala mine afloat, DiamonEx becomes the second major casualty in the mining industry to be affected by the credit crisis following last week's announcement that African Copper's Mowana mine has been placed under care and maintenance due to viability and cash flow problems.

The credit crisis has seen commodity prices falling while demand has hit an all time low because of reduced purchasing power. DiamonEx's fate is likely   to be worse this year as analysts have already predicted that   rough diamond prices  are likely to plunge by a further 30 percent.



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