Kopane Diamond Developments PLC

October 28, 2009 03:00 ET

Proposed Placing of Shares

28 October 2009

Proposed placing and issue of 27,942,857 New Ordinary Shares


The  Board of Kopane Diamond Developments plc today announces that it intends to raise £3.59 million before
expenses (£3.3 million after expenses) through a placing by FinnCap of 25,692,857 new Ordinary Shares  with
certain  institutional and other investors at 14 pence per share.  In addition, the Company is to  issue  a
further  2,250,000 new Ordinary Shares to satisfy a debt as described in the section headed  "The  Proposed
Placing"  below.  In  view  of the structure of the Placing as described in this announcement,  the  actual
proceeds  of the Placing may in practice be more or less than this amount.  The funds are being  raised  to
assess potential strategic opportunities and for general working capital purposes.

Institutional and other investors have conditionally agreed to subscribe for the New Ordinary Shares.   The
issue  of  the  New  Ordinary Shares is conditional, inter alia, upon the approval by Shareholders  of  the
Resolution  to  be sought at the GM convened for 16 November 2009.  Subject to Shareholders  approving  the
Resolution  to  be proposed at the GM, it is expected that Admission of the New Ordinary Shares  will  take
place  on  or  about 17 November 2009.  The New Ordinary Shares represent 12.5 per cent.  of  the  existing
issued share capital of the Company.

The  Placing  is  not  being  offered  on  a pro rata basis to existing  Shareholders  and  accordingly  is
conditional, inter alia, upon Shareholders resolving to disapply statutory pre-emption rights.  The General
Meeting has been convened for 11.00 a.m. on 16 November 2009 at which a special resolution will be proposed
to approve the allotment and issue by the Directors of the New Ordinary Shares pursuant to the terms of the
Placing  and the issue of the Warrants.  Authority will also be sought pursuant to the Resolution  for  the
Directors to allot the Further Ordinary Shares following completion of the Placing.

Background to the Placing and recent developments in Lesotho

The  Company  published an independently verified final resource statement in respect of the Main  Pipe  at
Liqhobong  on  10 September 2009. This has added substantial value to its diamond resource by  considerably
enhancing the mining potential of the Main Pipe. The new resource statement showed:

*     Improvement in grade confidence, based on a 141 per cent increase in the indicated resource  to  38.6
      million tonnes, potentially increasing the depth of a future open pit to 180 metres.
*     Main Pipe total resource of 90.03 million tonnes, an increase of 19.1 per cent over the interim
      resource statement issued in November 2008.
*     Gross diamond resource of 29.7 million carats (Kopane attributable resource of 22.3 million carats)
      contained in the Main Pipe to an average depth of 510 metres, with an estimated in situ value of 
      $2.54 billion based on September 2008 bulk sample diamond values.
*     Large diameter reverse circulation drilling results support an average grade of 33 cpht to at least
      510 metres average depth.

The  new  resource statement follows the completion of a detailed diamond and statistical analysis  of  the
results  of processing 1,800 tonnes of large diameter drilling samples through the Company's onsite  custom
built  5  tonnes  per  hour  Dense Media Separation plant. Supervision of this  work,  under  strict  QA/QC
conditions  by ACA Howe International Limited, has provided the Company with depth continuity data  on  the
diamond  grade for each of the kimberlite facies to at least 180 metres from the average surface elevation,
enabling  43  per cent of the kimberlite from surface to the 180m level (2,370mRL) to be classified  as  an
indicated resource and additional resources in the lower inferred category up to an average depth  of  510m
(from  2,370m  RL  to 2,040m RL). As is usual in the diamond industry, the indicated resource  category  is
generally accepted as the highest resource classification obtainable due to the nature of diamond deposits.

These  results  mean  that  the  Company  is able to demonstrate significantly  higher  confidence  in  the
recoverable resource, because the indicated resource of 38.6 million tonnes alone represents over 11  years
of  production at over one million carats per annum (based on a processing rate of 3.5 million  tonnes  per
annum  being  the assumed rate in the Pre-Feasibility Study published in 2007), which also better  supports
project financing alternatives for construction of a new processing plant.

In  addition,  the  new  resource statement shows a further inferred resource of 51.47  million  tonnes  of
kimberlite down to the 2,040 metre depth level only, which is an average depth of 510 metres below surface.
The mineralisation is open at depth, with one earlier diamond drill hole remaining in kimberlite to the end
of the hole at a depth of 650 metres below surface. The resource categorization and limits are based on the
same  parameters  used  for  the Pre-Feasibility interim resource estimate, which  was  also  independently
verified by Howe.

The final resource statement is set out below:

Category                 Attributable to LMDC (100%)                Net Attributable to Kopane (75%)
Main Pipe           Tonnes         Grade        Contained         Tonnes      Grade         Contained
Mineral           (millions)      (cpht)        diamonds        (millions)    (cpht)    diamonds (million
Resources                                       (million                                     carats)
Indicated           38,56           31            12,04           28,92         31            9,03
Inferred            51,47           34            17,66           38,60         34            13,24
Total               90,03           33            29,70           67,52         33            22,27
Source: ACA Howe International Limited

1.    Bottom cut off screen size of 1.0mm
2.    Results based on the 3D spatial estimate utilising diamond data collected from 26 LDD holes

The  Directors believe that the revised overall grade estimate of 33 cpht is the lowest estimate in a range
of  grade  results ultimately possible in the Main Pipe due to anomalies arising from the diamond  recovery
analysis of the LDD samples. The analysis of these samples shows virtually no recovery of boart stones  and
reduced recovery of low quality (near gem) diamonds, which clearly reflects diamond losses incurred in  the
reverse  circulation LDD drilling process. The Company announced on 5 October 2009 that work will  commence
shortly by WWW International to evaluate the characteristics of these diamonds and the results of this work
will  be  announced  in  due course. The Directors believe that the 33 cpht grade could  be  increased,  or
otherwise there could be an increase in the value per carat above the $86 run of mine valuation.

The  new  resource statement updates the interim statement published in November 2008, which followed  bulk
sampling  and core drilling work and which resulted in a re-interpretation of the geological model  of  the
Main  Pipe, to a significantly greater resource of 75.6 million tonnes, 79 per cent greater than previously
estimated.   The bulk sampling programme consisted of a series of samples extracted and processed  to  test
the  grade of the four identified facies, namely the K2, K4, K5 and K6, totalling 33,921 tonnes, to provide
grade,  stone  size distribution and stone value data in each case. A total of 12,514 carats were  produced
from  the  bulk  samples, at a bottom cut-off of 1 millimetre. These carats were valued by  diamantiers  at
$86/ct.  in  September  2008 and, applying this value, the estimated in situ value of  the  Main  Pipe  was
calculated at $2.54 billion (29.6 million carats at $86 per carat).

The  $86  per carat run of mine valuation does not include the positive impact of large and bonanza stones,
which could provide material economic enhancement to the project value. This is illustrated by the sale, at
the  end  of  2006,  of  four  stones, believed to be fragments from a 100+  carat  stone,  which  totalled
approximately  78  carats and had a total value of $1.43 million and by the sale  in  July  2008  of  three
premium  stones,  totalling approximately 27 carats, for $0.63 million. All of these  premium  stones  were
sourced  from  the K5 facies. In addition, in 2008 Kopane saw the occurrence in the Main  Pipe  of  several
large  pieces  of  polycrystalline boart of over 100 carats each, including one  of  263  carats.  This  is
consistent  with the report of ACA Howe in respect of the PFS, which identified stone value as one  of  the
potential areas of upside for the economics of the Main Pipe project. The Directors are therefore confident
that the Main Pipe will yield further large stones, although the proportion of which will be of gem quality
is unclear.

The Company is not currently producing rough diamonds, having suspended production from its Satellite Plant
operations  at the beginning of December 2008 due to the sharp fall in prices available for rough  diamonds
as  a result of the world economic situation. Prices fell by some 30 - 50 per cent. from October 2008 until
the  first  quarter  of  the  2009  calendar year; since then prices have  improved,  according  to  market
indications by some 25 per cent, but the sustainability of these increases and the timing of further  rises
is  uncertain  at  this  time, although the outlook for diamond prices is considerably  improved  over  the
situation in late 2008 and early 2009. The market price for the Company's rough diamonds is being monitored
to  enable  there  to be a resumption in production at the appropriate time. The Company remains  confident
that  the  medium  and long term outlook for rough diamond prices is likely to be robust  in  the  face  of
projected supply shortages.

In addition to the placement of the operation at Liqhobong onto a care and maintenance footing, the Company
has  taken  other  measures  to  conserve  cash by reducing corporate  overheads,  including  salaries  and
associated overheads, consulting fees, travel, investor relations and advertising.

The Group's Finnish Joint Venture

The  Company's  Finnish Assets are being operated, financed and developed under a Joint  Venture  Agreement
with  Mantle Diamonds Limited. Under this JVA, Mantle can earn up to a 70 per cent. interest in the Finnish
assets  by  expending  US$5 million, including producing a definitive feasibility study  on  the  Lahtojoki
property and issuing Kopane with 10 million shares in Mantle, with a pre-IPO value of £2 million.  To date,
Mantle has spent over £700,000 in respect of the definitive feasibility study at Lahtojoki.

The  Company  owns  3.4  million shares in Mantle, which at 31 December 2008 had  an  attributed  value  of
£334,000. Under the terms of the JVA, the Company was, subject to certain conditions, due a cash payment by
Mantle  of  £667,000 in August 2009; Mantle has requested deferment or other settlement of this obligation,
which  is  currently  under  discussion  with  them. Sums that  may  become  due  from  Mantle  and/or  the
monetarisation of these assets have been excluded from the Company's near term cash projections.

Reasons for the Placing and Use of Proceeds

The  Company  announced on 30 March 2009 that it had placed 50 million new ordinary shares to  raise  £1.75
million,  in  order  to progress work in respect of the Definitive Feasibility Study and Environmental  and
Social  Impact Assessment of the Group's Main Pipe Project at Liqhobong in Lesotho and for general  working
capital  purposes.  It was recognised that further working capital, estimated then at  some  £2.4  million,
would  be required in order to fund completion of the DFS and to finance the Company until the end of 2010,
which is the expected time of funding of the construction of the Main Pipe Project. Expenditure on the  DFS
is discretionary and will be incurred in accordance with available cash.

The Company published an independently verified final resource statement in respect of the Main Pipe on  10
September  2009,  following completion of the diamond analysis of 1,800 tonnes of large  diameter  drilling
samples.  Other work on the DFS which remains to be completed is primarily in respect of the design of  the
plant and tailings storage, infrastructure and the environmental impact of the project.

The  Company's  cash resources at 1 October 2009 amounted to approximately £0.4 million. The  cost  of  the
remaining DFS work has been reviewed further, in the light of recent significant strengthening of the South
African  Rand  against  the Pound Sterling and the scope of the remaining plant and  tailings  design  work
required  to  reflect  the greater resource in the Main Pipe.  Assuming these unfavourable  exchange  rates
persist until the end of 2010, the amount of the additional required working capital would be approximately
£3.2 million (an increase of £800,000 on the March 2009 estimate), including contingency reserves.

The  Company  has deferred incurring expenditure on certain elements of the DFS in favour of  proposing  to
incur  expenditure  on  other  items which will have a more immediate revenue generation  potential.  These
include  reviewing the re-commencement of diamond production at the Satellite Plant at Liqhobong  alongside
investing  in  a significant expansion of the existing Satellite Plant, which currently has a  capacity  of
approximately  425,000 tonnes per annum, in order to take advantage of any sustained  increase  in  diamond
prices.  This  review  will assess the feasibility of operating the Satellite Plant with  diesel  generated
power  ahead  of connection to the grid electricity supply planned in the first half of 2011.  The  Company
will  also  review the most economical ways of expanding production to potentially 1.4 million  carats  per
annum  with  the  aim  of  limiting Shareholders' equity dilution as much as  possible.  This  review  will
encompass trade off studies to assess the timing and impact of further expansion of the Satellite Plant  as
well  as the possible gradual construction of the new Main Pipe plant and funding options for the Main Pipe

The  Company announced on 5 October 2009 that, following discussions regarding potential investment in  the
Main  Pipe  Project,  an  exclusivity agreement, valid for a period of 60 days, had  been  signed  with  an
established mining company to allow it to review the project in more detail. The mining company is able  to
offer  the  technical, operational and financial capability to take the Liqhobong Main Pipe to  full  scale
production.   The  Directors  believe that investment by a mining company  with  these  capabilities  could
provide  an  expeditious  route  to  realising full value for the  Company  without  incurring  significant
shareholder dilution.  Shareholders should note that these discussions may or may not lead to an agreement.

Consequently,  the  Company  wishes to raise sufficient funds to enable it to  assess  potential  strategic
opportunities  and  for  general working capital purposes, which it believes to be  in  shareholders'  best
interests.   Absent  a  strategic investment in the Group, further funding would be  required  to  re-start
production, invest in a significant expansion of the Satellite Plant and for the construction of  new  Main
Pipe Plant.

The Proposed Placing

The  Company is proposing to raise approximately £3.59 million before expenses by the issue of the  Placing
Shares  pursuant to the Placing at 14p per share.  The Placing Shares have been conditionally  placed  with
institutional and other investors subject to, inter alia, the Resolution being approved by Shareholders  at
the GM.

As  part of the Placing, subject to the passing of the Resolution, 22,500,000 of the Placing Shares at  14p
per share will be issued to Lanstead Capital L.P., an institutional investor, for an aggregate subscription
price  of £3,150,000.   In addition, the Company will enter into an Equity Swap Agreement with Lanstead  so
the  Company will retain much of the economic interest in the shares issued to Lanstead.   The Equity  Swap
Agreement will allow the Company to secure much of the potential upside arising from near term news flow.

The  Equity Swap Agreement provides that the Company's economic interest will be determined and payable  in
24 monthly tranches as measured against a Benchmark Price of 18.67p per share.  If the measured share price
exceeds the Benchmark Price, for that month the Company will receive more than 100 per cent. of the monthly
payment  due.   There is no upper limit placed on the proceeds receivable by the Company  as  part  of  the
monthly  tranche payments.  Should the share price be below the Benchmark Price, the Company  will  receive
less  than  100  per cent. of the monthly payment due, and there is no lower limit placed on  the  proceeds
receivable.  In no case would a decline in the Company's share price result in any increase in  the  number
of  Ordinary Shares received by Lanstead or any other advantage accruing to Lanstead.  The mid market price
of an Ordinary Share at the close of business on 27 October 2009 (being the latest practicable day prior to
the publication of this announcement) was 14p.  The costs of entry into the Equity Swap Agreement including
legal  and  due diligence fees is approximately £350,000, £35,000 of which has been paid in  cash  and  the
balance will be satisfied by the issue of 2,250,000 of the New Ordinary Shares to Lanstead.  There is  also
a  carrying cost arising from the Equity Swap Agreement anticipated to be approximately £16,000 per  annum.
In  total  Lanstead will be issued 24,750,000 Ordinary Shares representing 9.8 per cent. of  the  Company's
enlarged  issued share capital following the Placing.  The Board is pleased to have secured these funds  on
these  terms  which  allow the Company and its shareholders to further benefit from the potential  positive
near term news flow.

Pursuant to the Placing Agreement, FinnCap has agreed to use its reasonable endeavours to place the Placing
Shares  with  institutional  and other investors on the terms of the Placing at  the  Placing  Price.   The
Placing has not been underwritten.

The issue of the New Ordinary Shares is conditional, inter alia, upon:

*     the passing of the Resolution at the GM;
*     the Equity Swap Agreement and related documents becoming unconditional and not being terminated in
      accordance with their terms; and

*     Admission of the New Ordinary Shares becoming effective on 17 November 2009 (or such later date as
      the Company and FinnCap may agree but not later than 24 November 2009).

The  Placing Agreement contains warranties given by the Company with respect to the business of  the  Group
and  certain matters connected with the Placing. The agreements with Lanstead contain warranties  given  by
the  Company  in relation to its business and other matters. In addition, the Company has given indemnities
to FinnCap in connection with the Placing and the performance by FinnCap of its services in relation to the
Placing. Furthermore , as part of their consideration for the provision of services pursuant to the Placing
Agreement,  the Company has agreed, conditional upon Admission, to issue to FinnCap warrants  to  subscribe
for  1,500,000 Ordinary Shares at an exercise price of 25p per share. The warrants are exercisable  at  any
time up to 16 November 2014.

The  New Ordinary Shares represent approximately 12.5 per cent. of the existing issued share capital of the
Company and will when issued rank pari passu with the existing Ordinary Shares in issue on the date of this
announcement.   Application will be made to the London Stock Exchange for the New  Ordinary  Shares  to  be
admitted to trading on AIM and it is anticipated that dealings in the New Ordinary Shares will commence  on
AIM on 17 November 2009.

The  Directors  believe  that  raising new funds by way of the Placing is the most  appropriate  method  of
funding the Company at the present time.  The Board considers that a general offer to existing Shareholders
by  way  of rights or other pre-emptive issue is not appropriate at this stage of the Company's development
due  to  the significant additional costs that would be incurred and the delay that would be caused by  the
production and approval of a prospectus.

Current Trading and Prospects

The DFS was scheduled to finish in mid 2009 but there have been delays in its completion, due primarily  to
the  longer  time  required to complete the large diameter drilling processing of  samples  and  subsequent
diamond  analysis of the results. This has had a consequent timing impact on the completion  of  plant  and
tailings  design  work.  The remaining DFS activities involve primarily completion of  plant  and  tailings
storage  design,  infrastructure requirements and completion of the environmental impact statement  of  the

The Directors believe that further funds raised at this time as contemplated by the Placing would be better
spent  on providing working capital to enable potential strategic opportunities for the development of  the
Main  Pipe  to  be  reviewed, for possible recommencing production at the Satellite Plant and  the  related
investment in facilities to provide a more immediate financial return. Therefore, other than essential work
and   that in connection with the environmental impact assessment, further significant work on the DFS  has
been deferred for the immediate future.

On  17  August  2009  the  Company announced that an MOU had been signed between the Company's  subsidiary,
Liqhobong  Mining Development Company, Lesotho Electricity Company, Standard Lesotho Bank Limited  and  the
Government of the Kingdom of Lesotho, in respect of funding of the construction of an electrical power line
to the Company's mine at Liqhobong in Lesotho.

The  MOU contemplates funds being lent by SLB to LEC to fund the construction of the power line from  LEC's
sub-station  at Ha Lejone, which is approximately 30 kilometres from Liqhobong. In addition,  LEC  and  GOL
will  contribute funds towards the cost of the project and GOL has agreed to provide a sovereign  guarantee
to  SLB in respect of the loan funding. LMDC will service the loan and its repayment on terms to be agreed.
The cost of grid electricity is expected to represent a significant saving over diesel generated power.

The  power line project to connect Liqhobong to the electricity grid system is the first phase of a  larger
electrification  plan to be undertaken in the region by LEC which will provide electricity  to  communities
along the line route.  The engineering specifications of the power line, together with environmental impact
assessment  studies, have been completed and construction will commence once funding is  in  place.  It  is
expected that this will enable grid electricity to be connected to the mine site by the first half of 2011.
The  availability  of  grid  power would also mean that it would become more  practicable  to  undertake  a
significant  expansion  of the Company's Satellite Plant from its current capacity of  425,000  tonnes  per

The  Satellite  Plant  remains  on care and maintenance but the Company is currently  considering  the  re-
commencement of production at Liqhobong and investment in expanding the capacity of the Satellite Plant. In
addition, it was announced on 5 October 2009 that an established mining company is undertaking a review  of
the  Main  Pipe project, under a 60 day exclusivity agreement, to determine whether it wishes  to  make  an
investment in the Main Pipe Project, on terms to be negotiated. These discussions may or may not lead to an

General Meeting

A  circular to shareholders to convene a General Meeting to be held at the offices of FinnCap at 4  Coleman
Street,  London  EC2R  5TA  at 11 a.m. on 16 November 2009 is being sent to shareholders  today.   At  this
meeting,  a  special  resolution will be proposed to grant a new authority and power to  the  Directors  to
permit  them  to  allot the New Ordinary Shares on a non pre-emption basis pursuant to the  Placing.   This
authority will also permit the Directors to issue the Warrants and a further 1,500,000 Ordinary Shares on a
non  pre-emptive  basis  following the Placing. The Directors believe it is in the best  interests  of  the
Company to have the flexibility to issue the Further Ordinary Shares should the need arise.

Whilst a proportion of the Company's spending is discretionary, Kopane's cash position will only allow  the
Company  to  continue  to  meet its obligations until approximately the end of 2009.   Accordingly,  it  is
important that Shareholders vote in favour of the Resolution to be proposed at the GM to allow the  Company
to raise further funds through the issue of equity to permit it to continue to trade as a going concern.

Francesco  Scolaro,  Chairman  of the Company today said: "I am very pleased  with  the  support  shown  by
investors  to  fund  the  Company in the coming period as we add value to our assets  and  as  we  consider
strategic  options  to develop the Main Pipe in the best way to maximise shareholder  value.  The  recently
announced  new resource statement for the Main Pipe shows that it is much larger than previously  estimated
with  enhanced mining potential and we look forward to becoming a significant independent producer of rough


For further information contact:

Kopane Diamond Developments Plc                           Threadneedle Communications
Francesco Scolaro, Chairman                               Laurence Read/Graham Herring
James Cable, Finance Director                             +44 (0) 20 7653 9855
+44 (0) 20 7963 9590                                      

JMFinn Capital Markets Limited                            
Matthew Robinson
Ed Frisby
+44 (0) 20 7600 1658
e-mail: ir@kopanediamonds.com
website: www.kopanediamonds.com


JMFinn  Capital Markets Limited, which is authorised and regulated by the Financial Services Authority,  is
acting  exclusively for the Company and no-one else in relation to the Placing and will not be  responsible
to  any  person  other  than the Company under FSMA, the rules of the FSA or otherwise  for  providing  the
protections  afforded to its clients or for any matter concerning the Placing or for  providing  advice  in
relation  to  the  Placing or in relation to the contents of this announcement or  any  other  transaction,
arrangement or matter referred to herein.

This  announcement is for information purposes only and does not constitute an offer to issue or  sell,  or
the solicitation of an offer to subscribe for or acquire, any securities to any person in any jurisdiction,
including without limitation in the United States, Canada, Australia or Japan.

The  distribution of this announcement and the Placing and/or issue of the New Ordinary Shares  in  certain
jurisdictions  may be restricted by law. No action has been taken by the Company or JMFinn Capital  Markets
Limited,  or  any of their respective affiliates that would permit an offer of the New Ordinary  Shares  or
possession  or  distribution of this announcement or any other offering or publicity material  relating  to
such  New Ordinary Shares in any jurisdiction where action for that purpose is required. Persons into whose
possession  this  announcement comes are required by the Company and JMFinn  Capital  Markets  Limited,  to
inform themselves about and to observe any such restrictions.

This  announcement  is  not an offer of securities for sale in the United States.  Securities  may  not  be
offered  or  sold  in  the  United States absent registration under the US  Securities  Act  of  1933  (the
"Securities Act") or an exemption therefrom. The Company has not registered and does not intend to register
any  of its Ordinary Shares under the Securities Act. The New Ordinary Shares are not being offered or sold
in the United States.


In  this  announcement, the following words and expressions have the following meanings unless the  context
otherwise requires:

"Admission"                     admission  of the New Ordinary Shares to trading on AIM becoming  effective
                                in accordance with the AIM Rules
"AIM Rules for Companies"       the AIM Rules for Companies published by London Stock Exchange
"AIM Rules for Nominated        the AIM Rules for Nominated Advisors published by London Stock Exchange

"AIM Rules"                     together,  the  AIM  Rules for Companies and the AIM  Rules  for  Nominated
                                Advisers governing admission to and the operation of AIM
"AIM"                           the AIM market of the London Stock Exchange
"Benchmark Price"               18.67p per Ordinary Share
"Board" or "Directors"          the board of directors of the Company
"Company" or "Kopane"           Kopane Diamond Developments PLC
"cpht"                          carats per hundred tonnes of kimberlite
"ct"                            carat
"Dense Media Separation"        the  process  of  separating relatively light (floats)  and  heavy  (sinks)
                                particles by immersion in a bath of intermediate density
"DFS"                           Definitive Feasibility Study on the Main Pipe
"Equity Swap Agreement"         an agreement to be entered into with Lanstead by the Company in relation to
                                the placing of 22,500,000 of the Placing Shares with Lanstead
"facies"                        the characteristics of a rock mass that reflects its depositional content
FinnCap                         JMFinn Capital Markets Limited
"Finnish Assets"                Kopane's 28 mineral exploration claims and reservations in Finland
"FSA"                           the Financial Services Authority
"Further Ordinary Shares"       up  to  a  further 1,500,000 Ordinary Shares which the Directors will  have
                                authority  to  allot  following  the Placing  (excluding  up  to  1,500,000
                                Ordinary  Shares issuable upon exercise of the Warrants),  subject  to  the
                                passing of the Resolution
"General Meeting" or "GM"       the  general meeting of the Company which has been convened for 11.00  a.m.
                                on 16 November 2009
"GOL"                           Government of the Kingdom of Lesotho
"Group"                         the Company and its subsidiaries
"Howe"                          ACA Howe International Limited
"Joint Venture Agreement" or    the joint venture agreement dated 11 January 2008 between Kopane and Mantle
"JVA"                           relating to the development of the Finnish Assets
"Lanstead"                      Lanstead Capital L.P.
"LDD"                           Large Diameter Drilling
"LEC"                           Lesotho Electricity Company
"LMDC"                          Liqhobong  Mining Development Company (Pty) Ltd, a company incorporated  in
                                Lesotho which is the Group's principal operating company in Lesotho
"London Stock Exchange"         London Stock Exchange plc
"Main Pipe Project"             the project to evaluate and develop the Main Pipe
"Main Pipe"                     the kimberlite pipe within the Company's licence at Liqhobong amounting  to
                                approximately 8.5 hectares
"Mantle" or "Mantle Diamonds"   Mantle Diamonds Limited, Kopane's Joint venture partner in relation to  the
                                Finnish Assets
"Memorandum of Understanding"   a Memorandum of Understanding between Liqhobong Mining Development Company,
or "MOU"                        Lesotho Electricity Company, the Government of the Kingdom of Lesotho and a
                                lending  bank,  in respect of funding of the construction of an  electrical
                                power line to the Company's mine at Liqhobong
"New Ordinary Shares"           the  Placing Shares proposed to be issued by the Company for cash  pursuant
                                to  the  Placing together with a further 2,250,000 Ordinary  Shares  to  be
                                issued  to  Lanstead  Capital LP as described in the  section  headed  "The
                                Proposed Placing"
"Official List"                 the Official List of the UK Listing Authority
"Ordinary Shares"               ordinary shares of one pence each in the share capital of the Company
"Placing"                       the  proposed issue of the Placing Shares for cash to institutional  and/or
                                other investors described in this announcement
"Placing Agreement"             an agreement dated 28 October 2009 between the Company and FinnCap relating
                                to the Placing
"Placing Shares"                25,692,857 new Ordinary Shares
"Placing Price"                 14p per New Ordinary Share
"Pre-Feasibility Study" or      the Pre-Feasibility Study on the Liqhobong Main Pipe published in July 2007

"QA/QC"                         quality assurance/quality control
"Resolution"                    the resolution set out in the Notice of General
"RL"                            Reduced  Level, being the elevation of a point or surface to a given  datum
                                or other known height,
"Satellite Pipe"                the  kimberlite pipe within the Group's licence at Liqhobong  amounting  to
                                approximately 0.8 hectares
"Satellite Plant"               the  Company's  425,000  tonnes  per  annum  diamond  processing  plant  at
                                Liqhobong  originally constructed to process diamonds  from  the  Satellite
"Shareholders"                  holders of Ordinary Shares
"SLB"                           Standard Lesotho Bank Limited
"UK Listing Authority"          the  Financial  Services Authority acting in its capacity as the  competent
                                authority for the purposes of Part VI of the Financial Services and Markets
                                Act 2000 (as amended)
"UK" or "United Kingdom"        the United Kingdom of Great Britain and Northern Ireland
"$" or "US$"                    the lawful currency of the United States
"£"                             the lawful currency of the United Kingdom
"Warrants"                      warrants  to  subscribe for 1,500,000 Ordinary Shares at 25p per  share  as
                                constituted by the Warrant Instrument constituted on 28 October 2009

Contact Information

  • Kopane Diamond Developments PLC