Mining giant signs new deal

MASERU — Mining giant, Kopane Diamond Developments, on Monday signed a non-binding memorandum of understanding (MoU) with an unnamed company to develop the Liqhobong mining project in Lesotho.
Kopane holds a 75 percent stake in Liqhobong Diamond Mine with the government of Lesotho owning the remaining 25 percent.
The mine is in Mokhotlong.
In a statement released on Monday, Kopane Diamond Developments chairman Frank Scolaro said the new partner was expected to fund and develop the kimberlite project at Liqhobong.
According to the statement Kopane is willing to give out 51 percent of its 75 percent shareholding in the Liqhobong in exchange that the mining company covers 80 percent of the costs of developing the mine to the production of over one million carats per annum.
“The signing of the MoU with the mining company is a significant step in the development of our Liqhobong assets.
“Our MoU partner proposes to fund 80 percent of the cost of new plant and the recommencement of production, which substantially reduces risks of funding and implementation, and avoids dilution for Kopane’s shareholders,” Scolaro said.
The company said it had recently raised £5.7 million (about M68.12 million) which was to improve infrastructure at the mine and increase its production capacity.
The two companies have agreed that Kopane`s partner will seek to recover an approximate of about 200 000 carats over a period of 18 months.
“Revenues generated from the sales of the diamonds in excess of costs will be shared between the two parties,” Kopane Diamonds said in the statement.
“Under the MoU, funding for the project is substantially secured and operating risks reduced,” said the statement.
In December last year Kopane announced after further studies it had discovered that the Liqhobong main pipe contains an estimated 31.14 million carats, which was an improvement from the initial 29.7 million. 
The mining sector is on the up in Lesotho as a significant number of high quality stones have been recovered and the number of diamonds mine is increasing.
Kopane Diamond Developments is a diamond producer, developer and explorer with core projects at Liqhobong in Mokhotlong district.
The company has to date produced over 350 000 carats diamonds since operations began in 2005.