The loan is repayable in eight quarterly payments commencing December 2018, by when Lucapa Diamonds expects Mothae to be in steady state production under its Phase 1 development plan.
The Equigold facility carries an annual interest rate of 13% and other fees customary to a facility of this nature.
The facility includes a provision for Equigold, at their election, to convert the last two scheduled quarterly payments (totalling US$3.75 million) into ordinary shares in Lucapa Diamonds at the lowest one-day VWAP in the 15 days preceding the conversion request.
Lucapa Diamonds MD Stephen Wetherall says, “The US$15 million financing facility enables Lucapa Diamonds to meet one of its key strategic objectives of growing diamond production in the large and premium-value sector – a segment of the global market where sales and pricing has remained robust.”
“This facility is a significant result for Lucapa Diamonds and its shareholders. It ensures that the company, together with the Government of Lesotho, will bring Mothae on stream in 2018, adding a second cash producing asset and high-value producing mine to the group that will complement the top-quality diamond production from Lulo,” explains Wetherall.
As announced on 31 January 2017, Lucapa Diamonds secured its 70% stake in the advanced Mothae kimberlite project in an international tender run by the Government of the Kingdom of Lesotho (GoL).
The GoL remains a 30% partner.
Mothae is located within 5 km of the Letšeng mine, which produces the highest average $ per carat kimberlite diamond production in the world.
The advanced nature of the Mothae kimberlite project – which has historical expenditure of US$36 million and recovered more than 23 000 carats of diamonds during an extensive trial mining phase – has enabled Lucapa Diamonds to fast-track its development under a staged, low-risk plan.
Lucapa Diamonds’ recent work streams at Mothae included optimising Phase 1 to further enhance the economics of the project by increasing diamond production and bringing forward cash flows in what was an already robust project.
Feature image credit: Lucapa Diamonds