Govt processing Mothae sale’
THE government of Lesotho is processing the $8.5-million (about M92.42 million) disposal of Mothae Diamond Mine by Lucara Diamonds to Paragon Diamonds.
This was said by Lucara COO Paul Day during the Botswana Resource Sector Conference in Gaborone.
Situated on the southern edge of the Kaapvaal Craton, which hosts the diamondiferous northern Lesotho kimberlite field, Mothae Diamond Mine is a joint venture between the Canadian-listed Lucara Diamond Corporation and the government of Lesotho.
Next to Gem Diamonds’ Letseng mine, Mothae Diamond Mine has an indicated resource of one million carats and an inferred resource valuation of $1 billion.
Lucara, which is listed on the TSX Exchange, Nasdaq Stockholm and the Botswana Stock Exchange, holds a 75 percent stake in the mine with the government of Lesotho holding the remaining 25 percent. It also mines at Karowe in the Orapa diamond field in central Botswana.
Last month, Lucara signed a Memorandum of Understanding (MOU) with Paragon Diamonds to sell its 75 percent interest in Mothae Diamond Mine.
An Alternative Investment Market-listed diamond development company, Paragon Diamonds was incorporated in 2010. In May 2011, it completed the acquisition of International Diamond Consultants, a privately-owned group of companies which held a prospecting licence over the Lemphane Kimberlite project in Lesotho. The subsequent exploration programme resulted in the award of a mining lease for the Lemphane Kimberlite in March 2014.
Following the MOU, Paragon Diamonds released a statement saying the acquisition was subject to approval from the government of Lesotho, a binding share purchase agreement, funding and other regulatory approvals.
Read the statement: “Mothae represents a low cost opportunity for Paragon to generate significant value for shareholders through the recovery of additional large high value diamonds in tandem with the commencement of Stage 1 production at Paragon’s nearby Lemphane Kimberlite Pipe Project (‘Lemphane’).
“As a result of this exciting acquisition, the company believes that it is wholly appropriate to ensure that both Lemphane and Mothae are constructed simultaneously and thus at the lowest possible cost to benefit from economies of scale whilst adjusting the timescale for commencement of production of the enlarged asset portfolio to Q3 2015.”
Paragon Diamonds, which is expected to make cash payment upon the finalising of the acquisition, plans to polish a selection of diamonds recovered from the Mothae asset.
Lucara would receive a payment equal to five percent of the profits achieved from the sale of the polished stones. Lucara would also receive a payment equal to five percent of the profits achieved from the sale of rough diamonds not selected for polishing. — Staff Writer/engineeringnews.
Mothae is in the diamondiferous northern Lesotho kimberlite field.