African Mining Network

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AMN - LESOTHO: Lucapa acquires Mothae kimberlite project

The Government of the Kingdom of Lesotho has awarded the advanced Mothae Kimberlite Project to Lucapa following a competitive international tender process. Lucapa plans to bring Mothae into production within 12 months under staged low-risk development strategy.

Mothae has existing infrastructure and camp in place including a diamond processing plant. It is a high-quality advanced kimberlite diamond project for the following reasons:

- It has a NI43-101 indicated and inferred resource of 1 million carats o Located close to 3 diamond mines and only 5km from Letšeng, the world’s highest $ per carat kimberlite diamond mine

- 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 o Infrastructure in place enabling production within 12 months

- Phase 1 supported by robust mining plan with 18 month pay-back. Phase 2 to be scoped

- Very competitive acquisition price of US$9 million (for 70% interest) payable over 10 months. Compares with historical development spending of ~US$36 million

- Consideration 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

Lucapa managing director Stephen Wetherall says he was delighted that Lucapa’s proposal to acquire and develop the highly sought-after Mothae kimberlite project had been selected as the successful bid by the GOL.

“This acquisition is in keeping with Lucapa’s stated strategy of continued growth as a diamond producer and explorer. Mothae complements the producing high-value Lulo diamond mine and our highly prospective exploration assets in the advanced Lulo kimberlite project and the earlier stage Brooking and Orapa Area F projects.

“There is only one thing better than owning one diamond mine that produces large high value diamonds and that is owning two.

Mothae is a fantastic diamond asset, located in a cluster of operating diamond mines in Lesotho and just 5km from Gem Diamonds’ Letšeng mine, which is the highest average dollar per carat hard rock diamond mine in the world. Similar to Lulo in Angola, the Mothae kimberlite pipe hosts large premium-value and Type IIa diamonds.

“The market pricing and demand levels for such high-value stones remains robust, thus protecting the ability of large stone producing kimberlite projects, like Mothae, to sustain strong operating cash flows.”

www.lucapa.com.au