An attempt by US and UK hedge funds to revive the prospects of a Russian mine belonging to Archangel Diamond Corporation (ADC) has failed, Polished Prices reported.



The attempt by Elliott Management Corporation and Elliott Advisors hedge funds to buy a controlling share of Archangel Diamonds would have saved the diamond miner from liquidation because of its debts to diamond mining conglomerate De Beers.



Archangel Diamonds announced this week that it has "received notice from the investor group under the non-binding private placement term sheet announced June 4, 2009 that the investor has determined not to proceed on the terms contemplated in that term sheet and has, therefore, terminated it."



Instead of the proposed takeover by the hedge funds, Archangel announced the takeover would not go to a full shareholder vote, but would be adopted by De Beers, which holds 58% of ADC's shares through its Cencan subsidiary.



In May, De Beers said it would liquidate Archangel Diamonds by calling in a $10 million loan Archangel took from Cencan. Archangel then announced it could not repay the loan.