Lucapa departs despite mine being touted as second highest dollar per carat for kimberlite diamonds
Silence Charumbira
MASERU, Lesotho – Australian Securities Exchange listed Lucapa Diamond Company is set to dump its 70% stake in Lesotho mine, Mothae Diamonds.
“Lucapa Diamond Company Limited wishes to provide a corporate update following a review of the asset portfolio by the Company’s newly restructured board of directors,” Managing Director Nick Selby said in a statement Wednesday.
Selby said the Lucapa board was “considering all options for the divestment of its 70 percent stake in Mothae and the Company is discussing the options with the Government of the Kingdom of Lesotho, the 30 percent partner in the mine”.
He said Lucapa was “finalising a data room” for parties interested in the open cast mine located in the diamond-rich Maluti Mountains of Lesotho.
The mine began operations in 2019 and has been known to produce large, high-value diamonds which command the second highest dollar per carat for kimberlite diamonds worldwide.
The Board intended to prioritise the divestment process and will update the market in the coming weeks, Selby said.
Although no specific reasons have been revealed yet, Lucapa chairperson, Stuart Brown said it was “clear the company should streamline” its portfolio.
“On review, it is clear the company should streamline the portfolio to focus on our core assets in Africa and Australia.
“The company’s collaboration with the Lesotho Government on the Mothae Diamond Mine has been rewarding and our management have worked exceptionally well to optimise the plant to recover large diamonds. We expect there will be significant interest from those within the diamond industry and on a wider scale,” Brown said.
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Lucapa boss speaks on Mothae’s “solid performance” in 2023
In January this year, Selby had touted Mothae and its sister mine, Lulo, in Angola for a strong 2023 Q4 performance. At the time, Lucapa said both Mothae and Lulo delivered solid performances in the quarter ending 31 December 2023.
The company said Mothae had performed well despite a lower dollar per carat average.
Nevertheless, Selby said Mothae’s performance had positively impacted the overall diamond price for that year. The position had further been bolstered by Lulo’s high value recoveries in 2023.
Mothae set new annual records for tonnes mined and processed, carats recovered, and average price per carat achieved. All Q4 performance targets were achieved at Mothae the company adds.
That year, Mothae met full year guidance in all categories except price per carat mainly due to the absence of quality Type IIa diamond recoveries during Q4.
However, amid the softening of diamond prices and an uncertain capital market environment, in Q4, a decision was announced to scale back the original Merlin Diamond Project Feasibility Project in favour of a smaller scale and lower capital development study.
The alternative study was examining a lower-cost pathway to developing the mine and was expected to investigate, among other things, using existing resources such as the trial mining plant and front-end scrubber to get Merlin into production. As the smaller scale development option used some of the existing modelling and key workstreams, work was well advanced.
