MOTHAE Mine in Mokhotlong has realised US$3, 8 million from the sale of rough diamonds including those that were recovered last month when the company began commercial mining operations.
In a statement to the Lesotho Times this week, the company said the parcel of 5411 carats of rough diamonds was sold at a recent tender in Antwerp, Belgium for US$3.8 million. It said the diamonds were “recovered during the fourth quarter of 2018 and in the first month of commercial mining operations at Mothae in January 2019”.
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. It cost Lucapa US$9 million to acquire a 70 percent stake in the Mothae Mine. The government owns the remaining 30 percent share in the mine.
Last month, Mothae commenced the first phase of commercial mining operations which the company says will achieve profitability and cement its reputation as one of the major players in the diamond mining industry.
Mothae said the latest sale of the diamonds at the Antwerp auction was at an average price of US$707 per carat “with the highest price achieved for an individual Mothae diamond being US$36 664 per carat”.
Lucapa Managing Director Stephen Wetherall said, “Lucapa and the government of Lesotho were extremely pleased with the results of the sale of Mothae diamonds”.
“The solid bidding we witnessed in Antwerp for this first commercial parcel has certainly marked Mothae’s arrival on the international scene as a producer of top-quality goods, complementing those from our Lulo Mine (in Angola).
“The strong sales prices achieved for our quality, in the absence of a single stand-out stone, represent a great start for Mothae which augurs well for its future as a producer of exceptional diamonds and its contribution to the Basotho nation,” said Mr Wetherall.
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 outlined proposals to move into phased commercial production which commenced last month.
Lucapa budgeted US$17 million to commence Phase 1 of full-scale mining. Phase 1 of mining will run up to 2021.
The company documents further show that Lucapa 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.