Paragon: Speedy res­o­lu­tion in ev­ery­one’s in­ter­ests

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THIS ar­ti­cle, “Ul­ti­ma­tum for di­a­mond mine” ( Le­sotho Times, Jan­uary 14, 2016), has been no­ticed by a lot of Paragon Di­a­monds Lim­ited in­vestors and has brought to light a lot of unan­swered ques­tions re­gard­ing what has been go­ing on with the Mothae ac­qui­si­tion.

When Paragon’s Ex­ec­u­tive Chair­man, Philip Fal­zon Sant Man­d­uca, took charge he came with a vi­sion of cre­at­ing a new kind of Di­a­mond com­pany, one which would turn Paragon into a ma­jor player and pro­tect com­pa­nies value. He had 4 im­me­di­ate goals…. 1) Pro­tect­ing com­pany value 2) Ac­quir­ing Mothae 3) Fund­ing and 4) To com­mence min­ing ASAP. The way this has un­folded has left my­self and many other pri­vate in­vestors very up­set but af­ter read­ing this ar­ti­cle I can un­der­stand what has hap­pened.

Fund­ing for Lem­phane was never go­ing to be easy, but by ac­quir­ing Mothae that would have re­quired more fund­ing but eas­ier to ac­quire due to the scope of the min­ing. What we as pri­vate in­vestors were told was that new min­ing ma­chin­ery was re­quired to yield bet­ter qual­ity di­a­monds with­out break­ing the big­ger stones so I un­der­stand why older re­dun­dant ma­chin­ery was sold. Mr Man­d­uca stated that ac­quir­ing ma­chin­ery for two mines at once would be cheaper than ac­quir­ing ma­chin­ery for two mines sep­a­rately so we un­der­stood why he hadn’t started on Lem­phane straight away. What we weren’t aware of was that Paragon was con­trac­tu­ally ob­li­gated to start min­ing Lem­phane ear­lier. If the Min­is­ter and Paragon had not come to an ar­range­ment, I can then un­der­stand the bad faith the Min­is­ter views Paragon with. The Min­is­ter’s pri­or­ity is to en­sure that the coun­try’s in­ter­ests are looked af­ter and that the Ba­sotho peo­ple are given jobs and se­cu­rity that this brings…. es­pe­cially now that it looks like the real re­ces­sion is about to hit the world.

The global mar­kets are about to crash and any­body with a bit of sense would have known that a mas­sive re­ces­sion was on its way. Hence the rea­son why fund­ing has been hard to come by. Now Paragon has had her trad­ing sus­pended to pro­tect her against hos­tile takeovers and delisted due to this which the share­hold­ers are not happy about but un­der­stand why.

But what we are not happy about is how ne­go­ti­a­tions have taken place. There seems to be some mis­com­mu­ni­ca­tion be­tween Paragon and the Le­sotho govern­ment.

Paragon has ac­cord­ing to the above men­tioned ar­ti­cle failed to con­trac­tu­ally start min­ing Lem­phane. This has meant a fail­ure to cre­ate im­me­di­ate jobs for the lo­cal Ba­sotho peo­ple and text mes­sages are very un­pro­fes­sional. I can un­der­stand why the Min­is­ter is up­set be­cause Paragon so far has failed to show the Min­is­ter that it is go­ing to look af­ter the in­ter­ests of the Ba­sotho peo­ple.

I can also un­der­stand most (mi­nus one or two things) why Paragon has done what it has. Gen­er­at­ing fi­nance right now is an ab­so­lute night­mare in Europe es­pe­cially for a sec­tor that will be hard hit by a mas­sive global re­ces­sion ie: di­a­monds. But if t Paragon can mine Mothae and Lem­phane at the same time then Mr Man­d­uca will be able to build the com­pany he seeks to build which will thrive even in times of re­ces­sion un­like other di­a­mond min­ers.

At the end of the day, we all want the same thing. We all want min­ing to com­mence im­me­di­ately at both mines gen­er­at­ing in­come for Le­sotho and Paragon. As a na­tive of South Africa, I want jobs and in­fra­struc­ture for south­ern Africa es­pe­cially in this volatile re­ces­sion cli­mate.

If Paragon is al­lowed to mine both mines this will cre­ate an­other strong min­ing com­pany in Le­sotho cre­at­ing strong com­pe­ti­tion with the likes of Gem di­a­monds which would be favourable to the govern­ment rather than a small mo­nop­oly. Also should a re­ces­sion kick in soon other min­ers will need to cut costs firstly with job cuts, Paragon on the other hand will im­me­di­ately be cre­at­ing and main­tain­ing jobs en­sur­ing in­comes for the lo­cal pop­u­la­tions. And then ob­vi­ously in­vestors like my­self from South Africa will main­tain our in­ter­ests in a com­pany that will ben­e­fit south­ern Africa.

I per­son­ally be­lieve, that if Paragon has fi­nally got the money and can trans­fer it, Mr Man­d­uca and the Min­is­ter need to meet face to face in the tra­di­tional man to man for­mat, put away any gripes, apol­o­gise for all mis­un­der­stand­ings, of­fer new as­sur­ances (even be it bonuses to the lo­cal com­mu­ni­ties for loss of in­come, be­cause surely a Min­is­ter who can or­gan­ise his peo­ple jobs and a start­ing bonus would be­come a leg­end) and just get this deal signed so we can get to busi­ness, cre­ate jobs and start min­ing. Pro­long­ing this any fur­ther will only cost in­come for ev­ery­one in­volved.

RCM

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