Companies: DWY    KIM   

Depressed diamond miner KimCor is to acquire the gem interests of fellow AIM counter Dwyka Resources for shares.

In a deal exemplifying the strategies that small mining groups are now adopting to tap diminishingly adventurous capital markets, KimCor is raising its own South African diamond-producing potential to 200,000 carats a year, according to chief executive officer Martyn Churchouse, by buying Dwyka’s DDH subsidiary for shares. Using shares means that Dwyka, which wishes to focus on its promising Muremera nickel project in Burundi and gold interests elsewhere, will still have 50.9 per cent of an enlarged KimCor diamond venture.

Melissa Sturgess, Dwyka’s chief executive, is joining the board of KimCor, which is now set to become a ‘mid-tier’ producer. Churchouse says the company’s diamonds range widely in carat value, including some heavyweight alluvials.

Dwyka’s shares have perked up 0.25p to 38p, more than twice our recommendation at 16p in February, and should go further, though partial profit-taking might be prudent. KimCor, at 7.25p (down from last year’s 25p high), offers more speculative recovery possibilities.