Mothae begins commercial diamond mining

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Staff Writer

LUCAPA Diamond Company says it is commencing full scale diamond mining at its Mothae Mine in Mokhotlong and expects to make its first commercial diamond recoveries early next month.

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.

In a statement to the Lesotho Times this week, Lucapa Diamonds said it was “pleased to announce that the commissioning of the 1.1Mtpa treatment plant has commenced at the high-quality Mothae Mine in Lesotho”.

“The first commercial diamond recoveries are expected from the Mothae Mine in early November 2018, complementing production from the high-quality Lulo Mine operated by Lucapa in Angola. Production from the 1.1Mtpa Mothae treatment plant, which incorporates two diamond recovery circuits, will be ramped up …throughout December.

“The commencement of production from the new 1.1Mtpa diamond treatment plant will see bulk sampling operations concluded and the staff transitioning to the commercial diamond plant. More than 4100 carats of diamonds have been recovered from the bulk sampling of areas within the Mothae kimberlite pipe which had not previously been tested or had been inadequately tested during the previous trial mining phase. These recoveries included specials (large diamonds greater than 10, 8 carats).”

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 outlines proposals to move into phased commercial production in the second half of this year.

Lucapa had budgeted US$17 million to commence Phase 1 of full-scale mining in 2018. Phase 1 of mining will run from 2018 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.

In a report published on 29 January 2018, Lucapa states that the company has a development plan for the mine which will “deliver significant increases in kimberlite extraction, targeted diamond revenues and mine life”.

“The US$15m financing facility was secured to advance Phase 1 development of the mine, which is on schedule for commissioning in the second half of 2018,” the company states in the report titled ‘Quarterly Activities Report for the period ended 31 December 2017.

This week, Lucapa said the diamond recoveries during the trial mining period had since risen to 23 400 carats including specials of up to 254 carats.

The company also revealed that the first parcel of the Mothae bulk sampling diamonds has already been exported to Antwerp, Belgium and “Lucapa plans to export the remainder of the bulk sampling diamonds to Antwerp, ahead of the first scheduled sale soon.”

“The recovery of these large diamonds from the bulk sampling program conducted by Lucapa at Mothae is consistent with the recoveries made during trial mining operations conducted between 2008 and 2012. Approximately 23 400 carats of diamonds were recovered during the trial mining phase, including specials of up to 254 carats (boart) and 96 individual stones weighing more than 10 carats. Some of these trial mining diamonds achieved sale prices of up to US$57 000 per carat,” Lucapa said.

The term ‘boart’ refers to small, granular, opaque diamonds, used as an abrasive in cutting tools.

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