Troubled miner Merlin Diamonds says following a meeting with the ASX it needs to appoint two new independent non-executive directors.

Merlin Diamonds (ASX:MED) owns the Merlin diamond mine in the Northern Territory where Australia’s largest diamond — a 104.73 carat stone — was discovered in 2003.

The director appointments must be “to the satisfaction of the ASX”, Merlin told investors on Wednesday afternoon.

Merlin has received several queries from the ASX over its close relationship with its consultant, AXIS Consultants.

AXIS has provided Merlin with secretarial, finance, geology, exploration, IT and other services since August 2009.

During that time both companies have shared several directors including Mordechai and Joseph Gutnick and David Tyrwhitt.

Merlin also provided AXIS with a $13.8m loan.

Once the new appointments have been made, Merlin will then review and revisit the three ASX queries it received in October.

Merlin said if the ASX is satisfied with the outcome of the board review, it expects it will be reinstated to trading.

Stockhead is seeking comment from Merlin.