LUCAPA Diamond Company Limited this week reported the recovery of an 11, 88 carat diamond from its bulk sampling programme at its Mothae Mine as limited mining continues ahead of the commencement of full scale mining operations.
The diamond recovery comes on the back of last month's recovery of an 89-carat yellow diamond at the same mine. The 89-carat stone is the company's biggest after it dug up a 25-carat yellow gem in May this year.
In a statement to the Lesotho Times this week, Lucapa Diamonds Managing Director, Stephen Wetherall, said the diamond recoveries were extremely encouraging and validated Lucapa's decision to commit to a bulk sampling programme ahead of full scale mining which is set to commence before the end of the year.
"Lucapa Diamond Company Limited and the government of Lesotho are pleased to report the recovery of another special diamond from the ongoing bulk sampling programme at the Mothae diamond mine in Lesotho," Mr Wetherall said.
"The 11.88 carat diamond was recently recovered from the North zone and is the first Special recovered from that section of the Mothae kimberlite pipe from current bulk sampling.
"Significantly, the latest recovery at Mothae means all three zones sampled have produced specials -- an 89 carat was the largest special recovered from the south-east zone and a 25 carat was also recovered from the neck zone.
"The latest recovery from this bulk sampling provides further evidence that Mothae is another source of large diamonds and complementary to Lulo." Lulo Mine is Lucapa Diamond Company's flagship mine in Angola.
Mothae Mine is located close to the high dollar-per carat gem producer, Letšeng Diamonds in Mokhotlong. It was put up for sale by the government in February 2016 after prospective buyer, Paragon Diamonds Limited, failed to secure the requisite funding within the given time frame.
In April 2017, the government awarded mining rights to the Australia-based Lucapa Diamond Company to develop the mine which had been idle since 2015. Lucapa owns 70 percent of Mothae Mine while the government holds the remaining 30 percent shares.
Company documents seen by the Lesotho Times indicate that the trial mining at Mothae, since Lucapa took over, had produced more than 23 000 carats of diamonds with sales exceeding US$17 million.
This led Lucapa to draw up a development plan in October 2017, which outlines proposals to move into phased commercial production in the second half of this year.
Lucapa had budgeted US$17 million to commence Phase 1 of full scale mining in 2018. Phase 1 of mining will run from 2018 to 2021.
The company documents show that Lucapa have secured an additional US$15 million (M195 million) financing loan to develop Phase 1 of the Mothae kimberlite diamond mining project.
Phase 1 is expected to generate gross revenue earnings of US$79, 6 million while Phase 2 which will run from 2022 to 2031 will generate gross revenue earnings of US$697 million.
Lucapa is expected to incur royalties and marketing costs of US$5, 6 million for Phase 1 and US$48, 8 million for Phase 2.
Operating costs for Phase 1 have been pegged at US34, 1 million while those for Phase 2 have been pegged at US$307, 8 million.
Meanwhile, Lucapa also announced the immediate appointment of Ross Stanley as a non-executive director.
Board chairperson Miles Kennedy said Mr Stanley has "extensive background in the resources industry in Australia and Africa, specialising in drilling and related exploration and mining services".
He is the founder and managing director of Australian Securities Exchange listed Stanley Mining Services prior to its merger with Layne Christensen in 1997.
Lucapa also said that Gordon Gilchrist and Albert Thamm have advised the Lucapa board of their decisions to step down as non-executive directors.
The statement said that Mr Gilchrist is retiring while Mr Thamm's decision follows his recent appointment to a senior full-time position with a global mining company.
"Ross (Stanley) is a well-respected resources industry figure who brings an extremely valuable and complementary skill set to the Lucapa board through his extensive and successful background in the global mining and exploration industries.
"Gordon and Albert have been exceptional servants to Lucapa for many years and I express my heart-felt gratitude for the contributions both have made towards building Lucapa from a small exploration company to a growing producer of world class diamonds. They will both be missed.
"The board wishes Gordon well with his retirement plans after a distinguished career in the diamond sector and wishes Albert all the best with his increased responsibilities at his new company," Mr Kennedy said.
The Lucapa Board now comprises of Miles Kennedy (non-executive chairperson), Ross Stanley (non-executive director), Stephen Wetherall (managing director/chief executive officer) and Nick Selby (executive director/ chief operating officer).