Trivalence raises $1.1 million (September 19, 2001)

Diamond producer Trivalence Mining (TMI-V) has completed a private placement of a non-arm’s-length loan of $1.1 million, with proceeds earmarked for African projects.

The loan, which bears interest at an annual rate of 11%, is secured by a 2001 Series A no. 1 debenture, and is repayable in full on Aug. 21, 2003, unless extended by the lender.

The debenture provides for conversion of the principal amount into Trivalence units comprising one share and a share purchase warrant. The conversion price is 80 per unit until Aug. 21, 2003.

If the loan repayment date is extended, the conversion price rises to 90 per unit until Aug. 21, 2004. The conversion price increases by a dime each subsequent year the loan is extended through to Aug. 21, 2006.

Each warrant allows the holder to buy one Trivalence share at a price equal to the conversion price in effect at the time the debenture is converted. The warrants are exercisable until the due date of the loan, or until two years from the date of issue, whichever comes first.

All shares and warrants are subject to a 4-month hold period beginning on the date the debenture is issued.

Trivalence owns an 85% interest in the Aredor diamond mine in Guinea, West Africa, where it is exploring for kimberlite with partner Rio Tinto (RTP-N). The London-based major can earn up to a 58% interest in Aredor.

Trivalence also owns the Palmietgat kimberlite diamond mine in South Africa and holds a 3,700-sq.-km kimberlite exploration concession in Botswana.

Trivalence’s diamond production increase by 58% during the fiscal year ended June 30, thanks to the startup of Palmietgat, which cranked out 29,254 carats and added to the 35,126 carats of attributable production from Aredor.

Most of the stones were gems and industrials, and sold for US$1.3 million in four sales. A single parcel containing 1,715 carats from Palmietgat sold for US$254,859.