Lucapa Diamond Company is set to expand the Mothae diamond mine in Lesotho, Africa after being in production for less than two years.
The Mothae mine is the world’s second highest average US-dollars-per-carat kimberlite mine at $US500-$US750 ($687-$1031), and is set to increase in capacity by around 45 per cent.
Lucapa is targeting a 1.6 million tonnes a year processing capacity at Mothae in 2020/21, up from 1.1 million tonnes a year currently with plant modifications and infrastructure upgrades.
This is expected to increase production and revenue while reducing operating costs due to economies of scale.
“With the completion of this Mothae expansion, Lucapa will have successfully delivered on its group production growth target of 200 per cent,” Lucapa managing director Stephen Wetherall said.
“Lucapa looks forward to the returns expected to be generated from both expanded mining operations and growing shareholder value through cash flow generation and the kimberlite exploration program.”
The expansion is estimated to cost $US6 million and will be followed by the addition of another secondary crusher in due course to take the capacity of Mothae’s processing plant to 1.8 million tonnes a year.
Lucapa announced plans to raise $10 million to fund the expansion, which has received support from multinational diamond company and Safdico International subsidiary Ilwella.
The company has also signed an agreement with the Government of the Kingdom of Lesotho to implement a new marketing channel in addition to the tender and auction channel at Mothae.
“We are extremely pleased with the strong support shown by strategic and institutional investors in the value accretive expansion plan formulated by Lucapa and the Government of the Kingdom of Lesotho, our Mothae partner,” Wetherall concluded.
“The Mothae expansion should see a material increase in the benefits derived by the Basotho nation and to our shareholders.”