DiamondTech, a laser-based mining technology specialist, has been valued at £22 million after its shares were listed on AIM.
DiamondTech, a laser-based mining technology specialist, has been valued at £22 million after its shares were listed on AIM.
The company, which owns the intellectual property rights to the diamond recovery and sorting machine, the LRU, raised £4.25 million after it issued 34 million new ordinary shares at 12.5p each.
DiamondTech has simultaneously bought 100% of mining technology company Earlyworx in a deal that could be worth some £1.7 million. On completion, £900,000 was paid in cash with a deferred sum conditional on future production targets of the LRUs. Earlyworx’s 81% owned subsidiary, Primus Special Projects, which owns the system’s intellectual property, has filed worldwide patents to protect the LRU technology.
The proceeds of the IPO will also be used to repay shareholder loans and to fund the company’s working capital requirements.
DiamondTech will now commercialise the LRU technology by forming joint venture agreements with holders of mineral rights in South Africa and other diamond producing regions such as Africa, Russia, Canada, Brazil, Indonesia and Australia.
DiamondTech currently has one joint venture agreement signed up with the mineral rights holder of the Grasfontein resource, which forms part of the Lichtenburg alluvial system some 250kms west of Johannesburg.
The company was advised by law firm Fladgate Fielder, led by its corporate and intellectual property teams headed by partner David Robinson.
“This transaction was complex due to issues surrounding South African exchange control laws and intellectual property rights,” Robinson said. “The IP in the new diamond sourcing technology was the primary asset of this deal, as a result of which the company’s IPR had to be thoroughly investigated.”
DiamondTech was also advised on the acquisition by Bell, Dewar & Hall (BDH), which negotiated the acquisition agreement and the related preference share subscription agreements.
BDH also managed a due diligence investigation of the target company and its Primus Special Projects subsidiary.
As part of the due diligence investigation, BDH appointed the Mineral Corporation to carry out an audit on the mineral rights held under the current joint venture agreement.
The firm’s team was led by Amanda Tregoning, a director in its mergers and acquisitions practice, who has experience of local and offshore listings.
DiamondTech’s board believe their mining technology can process diamond bearing gravel significantly faster, more accurate and cost-effectively than available technologies.
The system uses lasers and a computerised optical recognition system to detect diamonds by passing through the raw material by identifying the wavelength shift, known as the Raman shift. Diamonds identified by the laser detection system are then automatically extracted by pneumatic jets and put into a safe that can only be accessed by authorised personnel.
