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Merlin Diamonds Ltd: THE INVESTMENT CASE

Merlin Diamonds aims to recover more large stones as production ramp up continues

The Merlin diamond mine produced the largest diamond ever discovered in Australia at 104 carats.
Merlin’s cut and polished diamonds -  whites and fancy yellow
Merlin’s cut and polished diamonds - whites and fancy yellow

Merlin Diamonds Ltd (ASX:MED) recently recovered two high-quality white diamonds weighing 18.4-carats and 9.5-carats from its Merlin diamond mine in the Northern Territory.

The two stones were recovered from freshly mined ore from the Ector pit where the processing of 60,000 tonnes of ore is ongoing.

Merlin expects additional large white diamonds to be recovered from the Ector pit as ore processing continues.

READ: Merlin Diamonds to double diamond output with new processing equipment

The company is also in the process of installing a new scrubber, which will more than double processing capacity to 100 tonnes per hour once installed.

The trommel scrubber washing plant

Increased processing capacity will naturally increase diamond recoveries.

READ: Merlin Diamonds investors back mine ramp-up convertible note funding

Merlin’s shareholders recently backed the issue of shares and $7.9 million of convertible notes to help fund the ramp-up of the Merlin diamond mine.

The shareholders ratified the issue of 600,000 convertible notes priced at $1 each that have a two-year term.

Merlin’s shareholders also approved the issue of 4,816,696 additional $1 notes to a variety of parties, including Exchange Minerals Ltd and Bloomgold Resources Pty Ltd which had the same term and conversion price.

READ: Merlin Diamonds recovers two large white diamonds, secures funding

Merlin’s investors also backed the issue of 130,638,082 shares after $645,000 of note deeds were converted on January 17.

The shareholders also supported the issue of 56,531,261 Shares to a variety of parties and the issue of 2.5 million of $1 convertible to Edensor Holdings Pty Ltd ATF Prolific Enterprises Trust.

Mordechai and Stera Gutnick are the directors of Edensor, with Stera also being a shareholder.

The pair’s support through the Edensor trust allow for $2.5 million to be used for mine operations and working capital.

READ: Merlin Diamonds recovers 32 pink diamonds, mining to ramp up

In the March quarter, Merlin recovered an 18.75-carat flawless cognac diamond at the mine site.

Merlin went on to obtain Government of the Northern Territory approval to start open-cut diamond mining and then discovered 32 pink diamonds, prompting a mining ramp-up.

Pink diamonds totalling 6.639 cts recovered from Merlin Diamond Mine

The world-class Merlin diamond mine is famous for its past production of large, high-quality diamonds.

Historically, the mine recovered the largest diamond ever discovered in Australia at 104 carats, also unearthing 43 carat, 32 carat and 28 carat diamonds.

Largest diamond found in Australia - 104.73cts

The mine’s historical production of 65-75% gem-quality compares favourably to Rio Tinto Limited’s (ASX:RIO) (LON:RIO) (NYSE:RIO) (SWX:RIOP) Argyle diamond mine gem quality of 5%.

Global average diamond-mine quality levels are about 20% gem-quality.

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Merlin’s cut and polished diamonds -  whites and fancy yellow
October 08 2018
The Merlin diamond mine produced the largest diamond ever discovered in Australia at 104 carats.

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