AMN - LESOTHO: Financing for Lucapa diamonds

Lucapa Diamond Company has secured a US$15 million financing facility to develop Phase 1 of the Mothae kimberlite diamond project in Lesotho. The debt financing will allow Lucapa to bring Mothae into production in 2018.

The secured US$15 million three-year debt facility has been arranged with private Singapore-based company Equigold Pte Ltd. It is repayable in eight quarterly payments commencing December 2018, by when Lucapa expects Mothae to be in steady state production under its Phase 1 development plan.

The facility includes a provision for Equigold, at their election, to convert the last two scheduled quarterly payments, totalling US$3.75 million, into ordinary shares in Lucapa.

Lucapa managing director Stephen Wetherall said, “The US$15 million financing facility enables Lucapa to meet one of its key strategic objectives of growing diamond production in the large and premium-value sector – a segment of the global market where sales and pricing has remained robust.

“This facility is a significant result for Lucapa. It ensures that the company, together with the Government of Lesotho, will bring Mothae on stream in 2018, adding a second cash producing asset and high-value producing mine to the group that will complement the top-quality diamond production from Lulo.”

Lucapa secured its 70% stake in the advanced Mothae kimberlite project in an international tender run by the Government of the Kingdom of Lesotho, which remains a 30% partner. Mothae is within 5km of the Letšeng mine, which produces the highest average $ per carat kimberlite diamond production in the world.

The advanced nature of the Mothae kimberlite project, which has historical expenditure of US$36 million and recovered more than 23,000 carats of diamonds during an extensive trial mining phase, has enabled Lucapa to fast-track its development under a staged, low-risk plan.

Lucapa’s recent work streams at Mothae included optimising Phase 1 to further enhance the economics of the project by increasing diamond production and bringing forward cash flows in what was an already robust project.

Lucapa is a growing diamond company with a portfolio of high-quality production, development and exploration assets in Angola, Lesotho, Botswana and Australia.

www.lucapa.com.au