The Government of the Kingdom of Lesotho (GOL) has awarded the advanced Mothae kimberlite project to ASX-listed Lucapa Diamond Company following a competitive international tender process. Mothae has a NI143-101 indicated and inferred resource of 1 million carats.
The agreements signed by the GOL and Lucapa will see Lucapa acquiring a 70 % interest in the project. The acquisition price is US$9 million (which compares with historical development spending on the project of approximately US$36 million).
The Mothae diamond project in Lesotho.
Infrastructure and facilities at Mothae include accommodation and site offices, workshops, a processing plant, a tailings storage facility, fresh water dams and diesel-generated power.
Lucapa’s Managing Director, Stephen Wetherall, said he was delighted that Lucapa’s proposal to acquire and develop the highly sought-after Mothae 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 5 km 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.”
Wetherall further stated that Lucapa’s widespread diamond mining experience and recent success in developing the Lulo mine – which delivered the highest price per carat run of mine diamond production in the world in 2016 – were key factors in its successful bid for Mothae.
The Mothae diamond resource is supported by extensive trial mining, drilling programmes and geological modelling conducted between 2008 and 2012. During this time, 31 bulk samples totalling 603 000 tonnes were extracted and processed from various locations and depths in three phases.
From these samples, a total of 23 446 carats of diamonds were recovered at an average grade of 3,88 carats per 100 tonnes (cpht) using a bottom cut-off size of -2 mm. The diamonds recovered included 96 stones weighing more than 10 carats. The gem-quality Mothae diamonds were sold in three separate sales and achieved prices up to US$41 500 per carat.
Previous development plans for Mothae have predominantly been focused on larger-scale mining and processing scenarios. In contrast, Lucapa will be adopting a staged, low capital and low risk approach to developing the kimberlite mine.
Lucapa and the GOL will develop the Mothae mine in two phases. Phase 1 is designed to generate early cash flows within 12 months of acquisition from a low up-front capital investment. The production plan involves processing approximately 2 Mt of weathered surface kimberlite material (including previous stockpiled material) over a minimum period of three years via conventional open pit mining. The planned treatment rate is 720 000 t/a.
The mining costs during this phase will be minimised because the weathered surface material at Mothae can be mined as ‘free dig’ which does not require conventional drilling or blasting. In addition, the mine plan includes very limited waste stripping.
Capital expenditure costs to bring Phase 1 into production are estimated at approximately US$12 million, which includes upgrading and improving the process plant to a capacity of 100 t/h, installing XRT technology to more efficiently recover large Type IIa diamonds and changing the plant front-end with further modifications to de-bottleneck the crushing.
During Phase 1 production, Lucapa will undertake additional studies to determine the scale and development of the Phase 2 plan, which will involve processing of material at higher rates from the deeper unweathered zone on a conventional open pit, drill and blast mining method.