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Lucapa Diamond Company completes second 2017 diamond sale

Lucapa has achieved gross diamond sale proceeds of A$9.1 million.

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227 carat Lulo diamond included in latest sale

Lucapa Diamond Company (ASX:LOM) and its partners have completed their second diamond sale for 2017 achieving gross sale proceeds of US$6.9 million (A$9.1 million).

The parcel of 1,552 carats of alluvial diamonds comes from the flagship Lulo Diamond Project in Angola.

The sale had an average price per carat of US$4,446 (A$5,836), underlining the quality of the diamond recoveries and the continued strength in the market for large, high-quality diamonds.

Inventory for the next diamond sale already includes a 62 carat diamond, a 65 carat diamond and a 25 carat stone.

The sale brings the total gross proceeds achieved at Lulo to date in calendar 2017 to US$10.7 million (A$14.0 million).

This recent sale marks a significant milestone for Lucapa and its partners by exceeding A$100 million in total sales to date.


Background

Lucapa’s flagship asset and principal investment is the Lulo Diamond Project, which is a partnership over a 3,000 square kilometre concession in the African country of Angola.

The Lulo project is a joint venture between Lucapa, Endiama (Angolan government) and Rosas & Petalas – a private partner.

Lucapa holds 40% of the alluvial diamond mining operations and is the operator where it recovers large premium-value diamonds of up to 404 carats.

These special diamonds account for 30% of the diamond weight but more than 90% of overall diamond revenues.


Recent diamond sales

Earlier in February, Lucapa and its partners completed the first sale of Lulo diamonds for 2017, which delivered gross proceeds of US$3.8 million (A$4.9 million).

In total the parcel comprised of 2946 carats, including a 75 carat diamond recovered in November, and a 55 carat diamond recovered in December.


Mothae acquisition

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

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.

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.

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.


Recent developments

Lucapa’s acquisition target that holds Mothae was recently issued a new 10-year mining licence.

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.

Quick facts: Lucapa Diamond Company

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