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Lucapa Diamond Company fulfils condition required for new acquisition

Published: 10:00 01 Mar 2017 AEDT

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Mothae kimberlite diamond project in Lesotho

Lucapa Diamond Company’s (ASX:LOM) acquisition target has been issued a new 10-year mining licence for the Mothae Kimberlite Project located in Lesotho, a country landlocked by South Africa.

The issuance of the new 10-year mining licence was one of the conditions required for Lucapa to acquire its 70% interest in Mothae Diamonds (Pty) Ltd, which has now been fulfilled.

The project is located in the advanced high-value Mothae kimberlite pipe in Lesotho.

Mothae is located within 5 kilometres from Letšeng, the world’s highest $ per carat kimberlite diamond mine.

Similar to Lucapa’s flagship Lulo diamond operation, Mothae has produced large and premium-value diamonds, including Type IIa stones.

Lucapa plans to bring Mothae into production within 12 months under a low-cost, staged development plan.

The Lesotho Ministry of Mining has received a legal challenge against the award of the
tender for Mothae Diamonds and has advised Lucapa that the challenge is unfounded, without merit and is being vigorously defended.


Acquisition details

Lucapa recently agreed to acquire the Mothae Kimberlite Project from the government of the Kingdom of Lesotho which retains 30% ownership.

Mothae is a high-quality advanced kimberlite diamond project and hosts a NI43-101 indicated and inferred resource of 1 million carats.

Trial mining has proven that similar to Letšeng, Mothae hosts large, premium-value and Type IIa diamonds, including individual stones up to 254 carats and gem-quality diamonds which have sold for up to US$41,500 per carat.

Key to the project is infrastructure in place enabling production within 12 months.

Lucapa outlined that Phase 1 is supported by robust mining plan with 18 month pay-back, with Phase 2 to be scoped.

Consideration of US$9 million is payable over 10 months, which compares with historical development spending of circa US$36 million.

Consideration is structured to enable Lucapa to fund acquisition from combination of existing cash, anticipated distributions from Lulo operations, in-the-money option conversions, financing or equity.

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