Sub-Sahara Mining & Industrial Journal
Featured Mining News World

Diamond miner digs deeper, harder

While some mining houses are downscaling projections due to global economic disruptions caused by COVID-19, Mothae – a diamond mine in Lesotho – is rolling out a major expansion drive that will see its ore processing plant upping output from the current 1,1 million tonnes per annum 1,6 million tonnes.

Australian Securities Exchange-listed Lucapa Diamonds Company holds 70 percent of the mine with the government of Lesotho controlling 30 percent.

Lucapa said the expansion started in the fourth quarter of 2020 when Mothae resumed full-scale operations following a six-month break due to the pandemic. The Lesotho government shut all mines in March 2020 as a virus control measure.

During the enforced break, Mothae embarked on a care and maintenance programme, and also secured a diamond marketing deal with the government that allows Lucapa to exclusively auction gems on alternative open markets on a trial basis. The Mothae management proposed last July that Lucapa get exclusive rights to purchase all the mine’s diamonds for five years without any tendering or auctioning.

This past week, Lucapa said the expansion drive would “lead to a 45 percent increase in annual output tonnes, recovered carats and revenue and is expected to generate an estimated US$67 million over six years”.

The expansion is being financed through disposal of an undisclosed number of shares to raise about A$10 million (about US$7,7 million).

“During the (fourth) quarter (of 2020), the company completed a successful placement, raising A$10 million primarily for the 45 percent expansion of the Mothae mine processing capacity … The shares were issued in two tranches, with the second tranche being approved at the general meeting on 17 December 2020.

“On 12 November 2020, shareholders approved the issue of shares and options to New Azilian Pty Ltd. On 17 December 2020, shareholders approved the second tranche of the A$10m placement and to ratify the prior issue of shares under the Australian Stock Exchange listing rules.”

Despite a tough 2020, Lucapa MD Mr Stephen Wetherall said diamond mining would rebound strongly on the back of firmer prices.

“We look forward to 2021 with great optimism following a strong final quarter from our two mines and particularly as the sector continues its positive momentum. The expansion of our Mothae Mine will enhance returns expected to flow to Lucapa this year from both our operations and the kimberlite bulk sampling programme at Lulo (a Lucapa asset in Angola) continues to demonstrate its prospectivity,” said Mr Weatherall.

Lucapa said its processed tonnage declined by nine percent due to the six-months’ suspension of operations.

“Despite being at 75 percent capacity due to COVID-19-related personnel constraints, the 280 248 tonnes of ore processed was only nine percent down on the comparative quarter.”

One of four diamond mines in Lesotho, Mothae produced 6,603 carats in Q4 2020, including 124 diamonds measured at over 4,8 carats as well as a massive 101 carat D-colour white diamond, among other exceptional stones.

“The 101-carat D-colour gem recovered is the fourth over 100 carat diamond recovered since commercial production commenced in January 2019. This is Mothae’s most valuable diamond ever recovered,” the company said.

Mothae also sealed a cutting and polishing partnership with Safdico late in 2020.

“Under this diamond sales and purchase agreement Mothae is paid the full market value of the rough diamonds upfront by Safdico and subsequently shares in an equal portion of all margins generated thereafter.”

Mothae started the year on a high note, selling a 4,676 carat parcel of rough diamonds worth US$5,6 million – or US$1,198 per carat – under the new marketing, cutting and polishing arrangements. This was the highest average price per carat achieved by Mothae since January 2019.

Related posts

Mining corporation SONAMINES seeks statutory and alternate auditors

Editor

CDE announces return of global virtual symposium for the wet processing industry

Editor

Atlas Copco Surface Rock Drill – Solid as a rock!

Editor

Leave a Comment