Lesotho – Paragon Diamonds, the AIM listed diamond company, has revealed that two independent studies carried on the Mothae kimberlite project which it is acquiring from Lucara Diamonds, have exceeded initial expectations.

The MSA Group conducted the two studies on the Lesotho-based deposit which have outlined the potential to significantly increase Mothae’s NPV from management’s original estimates. An improved strip ratio has been identified at <1:1 compared to <1.5:1 previously assumed and the potential for average diamond values up to $2 000/ct.

The study also offers several mining scenarios exceeding 20 Mt at $40+/t ore value in a low operating cost mine exceeding 2 Mt and 40 000 carats per year.

Mothae is also only 5 km from Gem Diamonds’ world class Letšeng diamond mine in Lesotho which is located within a cluster of kimberlites, including Paragon’s Lemphane kimberlite pipe project.

These technical reports are intended as components of a future preliminary economic assessment (PEA) and pre-feasibility study (PFS) and review multiple mining scenarios and simulated progressive cutting of processing costs, which will now be explored during final plant and open pit design work.

“The reports compiled by The MSA Group confirm and exceeds Paragon Diamonds’ initial internal projections of the resource being acquired at Mothae.  It is clear that the combined south-west and south-central domains in particular represent a higher-value, relatively higher-grade resource, exceeding 25 Mt in total, with the potential for a significant percentage of carats present in large diamonds,” says Paragon MD Dr Stephen Grimmer.

Acquisition update

Paragon is in advanced negotiations with several funding providers as it looks to complete the acquisition of a 75% interest in, and operatorship of, Mothae from Lucara Diamonds. Subsequent to the conclusion of these negotiations, the Board will select and announce what it deems to be the best funding package available.

“Subsequent to the new and positive confirmations provided by The MSA Group reports on Mothae, the Board has been intensively and positively refining the company’s funding options with potential financing partners from an enhanced commercial position,” says Paragon’s finance director Simon Retter.

“Several funding options are in advanced stage negotiations, with due diligence now complete.”

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