Govt bails out DiamonEx for Lerala Mine

The loan, extended to DiamonEx by Stanbic Bank Botswana, will enable the company to fund its operating costs following the anticlimactic sale of its first diamonds last month.

DiamonEx shareholders had been hoping its inaugural sale of 10 612 carats on October 30 would mark the beginning of returns on investment in a company whose road to production began in 2002 with the awarding of an exploration permit in the Tswapong area.However the sale was well below management's expectations, with the package selling for an average price of US$20 per carat instead of the anticipated average of between US$48 and US$57 per carat. Analysts said the depressed prices are symptomatic of the low prices prevailing for diamonds in a market where buyers are experiencing the effects of the international credit crisis.