Quarterly Report for the period ended 30 June 2009

 
TIDMDON 
 
DiamonEx Limited 
AIM Release 
 
31 July 2009 
 
QUARTERLY REPORT 
FOR THE QUARTER ENDING 30 JUNE 2009 
 
- Continuing suspension in trading of DiamonEx Limited ("DiamonEx" or 
the "Company") Shares 
- Execution of formal agreement for sale of majority interest of 
Diamonex Botswana Limited delayed 
- Lerala mine and plant on care and maintenance 
 
Background 
 
Diamonex Botswana Limited under Judicial Management 
 
As previously announced the impact of the global financial crisis on 
world diamond markets has rendered the production of diamonds by 
Diamonex Botswana Limited (DBL), DiamonEx's fully owned subsidiary 
uneconomic. 
 
A decision was made to apply to the High Court of Botswana for DBL to 
be placed under Judicial Management. The Judicial Management Order 
was confirmed on 27 March 2009 (Botswana time) and provides DBL with 
a period of immunity from claims from its creditors. 
 
The restructuring plan (Restructure) previously announced to the 
market was expected to be completed by end of May 2009. 
 
Status 
 
As previously announced one of the key issues for the completion of 
the Restructure was obtaining the agreement of DBL's finance 
providers to the Restructure and to enter into interim settlement 
arrangements with those finance providers. Delays in finalising these 
arrangements with the finance providers have delayed the completion 
of the Restructure. 
 
The European Investment Bank (EIB) is a key finance provider for DBL. 
Notwithstanding efforts by the Board and the proposed purchaser of 
the majority interest in DBL to reach an interim arrangement with 
EIB, EIB has elected to seek an order from the Botswana Courts to 
terminate the Judicial Management process. The hearing of EIB's 
application was held on 26 June 2009 and a decision is pending. The 
Restructure can not progress until judgement is given. The Company is 
unable to give any indication of the result of the case, however, the 
Board is proceeding on the basis that the decision should confirm the 
Judicial Management order and possibly impose certain conditions. 
In addition, EIB have made an application to the Botswana Courts 
seeking an order regarding the enforceability of the Deed of Pledge 
and Cession of Claims executed by DiamonEx and EIB. DiamonEx has 
engaged a Gaborone, Botswana based law firm to advise on this matter 
and subject to the advice provided intends to be in a position to 
defend EIB's claim. No date has been set for the hearing of this 
application. 
 
Suspension of Trading 
 
Upon obtaining the initial Judicial Management order, application was 
made to the Australian Securities Exchange, the Botswana Stock 
Exchange and the Alternative Investment Market of the London Stock 
Exchange to suspend trading in DiamonEx's shares. The Company's 
shares remain in suspension and will remain so until such time as the 
Company has completed the Restructure subject to all necessary 
regulatory approvals being obtained. 
 
The timing for the completion of the Restructure and the re-admission 
of the shares to trading will be in part determined by the conclusion 
of the legal proceedings in Botswana. The Board anticipates that its 
shares will remain suspended from trading up until 31 December 2009. 
The Future 
 
Completion of the Restructure will require the holding of a general 
meeting of DiamonEx shareholders to approve the sale of 80% of DBL 
and the restructuring process. All efforts of DiamonEx and the 
purchaser of the majority interest in DBL are being applied to bring 
this transaction to completion. 
 
Lerala under care and maintenance 
 
Currently the Lerala diamond mine is under care and maintenance, 
supervised by the court appointed judicial manager. 
 
Exploration activities 
 
No exploration activities have been undertaken by the Company in the 
last quarter. 
 
OUTLOOK FOR THE NEXT QUARTER 
 
The focus for the current quarter will be finalising the arrangements 
to complete the Restructure, on developing a funding strategy for 
DiamonEx that will provide a stable financial basis and in acquiring 
a suitable development project to take DiamonEx forward. 
 
For and on behalf of the Board 
 
Paul Crawford 
Company Secretary 
 
For further information contact: 
 
Dan O'Neill 
Managing Director 
Tel: [phone] 
Mob: [phone] 
Email: [e-mail] 
 
Greg King 
Chairman 
Tel: [phone] 
Mob: [phone] 
Email: [e-mail] 
 
Will Souter or Rob Adamson 
RFC Corporate Finance Ltd (Nomad) 
Tel: [phone] 
[phone] 
Email: [e-mail] 
[e-mail] 
 
Fox-Davies Capital Ltd (AIM Broker) 
Tel: [phone] 
 
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This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.