Lucapa Diamond cuts debt related to building Mothae mine
Australia's Lucapa Diamond (ASX:LOM) said Thursday it had signed funding and refinancing arrangements that will allow it to reduce debt related to developing its recently commissioned Mothae mine in Lesotho, South Africa.
The diamond producer has inked deals with New Azilian and Equigold, following the delivery and de-risking of Mothae, which began commercial production in December.
“These new refinancing arrangements will provide Lucapa with added financial strength to continue to build our strategic position in this niche high-value diamond sector,” managing director Stephen Wetherall said in the statement.
The Perth-based miner has inked deals with New Azilian and Equigold, following the delivery and de-risking of the Lesotho-based diamond mine, which began commercial production in December
The Perth-based company, which acquired Mothae in early 2017, has a 70% interest in the operation, while the government of Lesotho owns the remaining 30% of Mothae, which is located 5km from Letšeng, the world’s highest dollars-per-carat kimberlite diamond mine.
Lucapa has said it will update guidance for the mine in terms of volume, grade and price in the June quarter, after the first three months of commercial mining. For now, Mothae is expected to yield 22,000 carats per year.
The company also has a 40% stake in the prolific Lulo mine in Angola, a source of the world’s highest dollar-per-carat alluvial diamonds.
Currently, Lucapa is advancing two exploration projects in well-known diamond districts. One is at Brooking in the West Kimberley lamproite province of Western Australia. The other is a the Orapa Area F project in its namesake mine in Botswana, where it plans to drill kimberlite targets this year.
Diamond miners are struggling across the board, especially those producing cheaper and smaller stones where there is too much supply. In December, some of Rio Tinto’s (LON, ASX: RIO) customers refused to buy cheaper diamonds, while De Beers has been forced to cut prices and offer concessions to buyers.
Last week, Africa-focused Firestone Diamonds (LON:FDI) put plans to extend the life of its 75%-owned Liqhobong mine in Lesotho on the back burner, saying that current market conditions don’t support the project.