Lucapa Diamonds Mothae
The Mothae kimberlite diamond project in Lesotho.
ASX-listed Lucapa Diamonds has secured a US$15 million (A$19 million) financing facility to develop Phase 1 of the Mothae kimberlite diamond project in Lesotho.

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