Lucara Diamond Corp, the emerging diamond producer, said it has raised cash that will be used to fund the development of its projects in the southern African region.
The company said the $50 million (about P325. 7 m) facility provides certainty of funds, greater flexibility and reduced financial risk for the company, as it continues to develop and construct the AK6 Mine in Botswana with ongoing trial mining, in Lesotho, at Mothae.
Lucara’s CEO, William Lamb, said the funds are the last piece in the puzzle.
“The closing of the $50 million debenture demonstrates the robustness of the AK6 project,” Lamb said.
“The funds are the final piece in the puzzle allowing Lucara to fully finance the construction of AK6 and allow the company to take advantage of an ever improving rough diamond market,” he added.
Lucara said the facility is secured by a pledge by the company of the shares of its subsidiary which holds the AK6 Mine. 
The facility will be issued by Zebra Holdings and Investments S.à.r.l. (Zebra) and Lorito Holdings S.à.r.l., (Lorito), each an investment company owned by a trust settled by the late Adolf H. Lundin and each an insider of the company.
It has a maturity date of December 31, 2013 and requires quarterly repayments of principal commencing September 30, 2012. 
No interest is payable during the term of the facility. Interest at a rate of 5 percent per annum will accrue if the facility is not repaid by the maturity date or there is an event of default. 
The terms of the debenture also include the company issuing an aggregate of 9,000,000 common shares to Zebra and Lorito as consideration for the facility, in lieu of interest and fees, subject to approval of the TSX Venture Exchange.
Lucara has over the past months been working with a financial institution to arrange a project level facility.
“In reviewing the company’s financing options, it was concluded that the debenture provided the highest value to shareholders. The debenture provides certainty of funds, greater flexibility and reduced financial risk for the company, as it continues to rapidly develop and construct the AK6 Mine in Botswana with ongoing trial mining, in Lesotho, at Mothae,” the company said on its website.
The company’s two key assets are the AK6 diamond mine in Botswana and the Mothae diamond mine in Lesotho.┬áProduction at AK6 is expected to begin end of 2011 year.
The 100 percent owned AK6 project is in the construction stage with mine commissioning scheduled to commence in the fourth quarter of 2011. 
The 75 percent-owned Mothae mine is currently in the trial mining stage. Both Mothae and AK6 are world class assets with tonnage and throughput upside; diamond values from both could significantly increase with the continued recovery of Type IIA and large stones.
