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Lucapa Diamond acquiring 70% stake in Mothae kimberlite property in Lesotho

Lucapa Diamond Co. Ltd. is acquiring a 70% interest in the past producing Mothae kimberlite property after completing a tender process with the government of Lesotho.

The company will acquire a 70% interest in Mothae Diamonds (Pty.) Ltd., which holds the mining lease and related assets. The government of Lesotho will have a free carried 30% stake in the operating company.

Consideration comprises US$9 million, payable over 10 months, the company said Jan. 31. The deal remains subject to various conditions including regulatory approvals.

As part of the deal, Mothae Diamonds will be awarded a new 10-year mining lease, which can be extended by another 10 years.

The property hosts indicated and inferred resources containing 1.1 million carats within approximately 39.0 million tonnes grading 2.7 carats per hundred tonnes.

Lucapa Diamond aims to bring Mothae back into production as an open pit operation within 12 months using existing infrastructure which includes a processing plant.

The company will take a staged development approach, with phase-one operations expected to process about 2 million tonnes of weather surface kimberlite material over a minimum three-year period.

Phase-one CapEx is estimated at US$12 million, which includes upgrading and improving the processing plant to a capacity of 100 tonnes per hour and installing X-ray transmission technology.

Larger scale phase-two operations will be optimized upon completion of studies to be undertaken during phase one.