Lucara harvests high-value stones at Mothae

The first diamond tender from Lucara Diamond’s (LUC-V) 75%-owned Mothae mine, in Lesotho, brought in $8.2 million for 9,381 carats of stones earlier this year.

Nearly $2 million of the proceeds came from the three highest-value stones: a 13.87-carat diamond that fetched $43,000 per carat; a 24.57-carat stone that sold for $32,351 per carat; and a 20.13 carat gem that sold for $27,995 per carat. The average value was US$871.70 per carat.

The trail mining program at Mothae, which is being carried out to better define diamond grade, size distribution, and diamond values, will see 720,000 tonnes of kimberlite processed over an 18-24 month period.

As of March, five samples totalling 175,009 tonnes from the C domain of the Mothae kimberlite pipe returned an average grade of 3.13 carats per hundred tonnes (cpht). The C domain is likely the largest, with trial mining of the higher-grade F and G domains to come. The H domain has not yet been tested, while the E domain has seen limited sampling. One 1,592-tonne sample has been taken from the F domain during trial mining, yielding a grade of 4.88 cpht.

Lucara’s interest in Mothae is indirectly held through its subsidiary Mothae Diamonds. The Lesotho government holds the remaining interest, and has a 4% royalty on sales from the mine.

Construction is under way at Lucara’s 100%-owned AK6 mine, in Botswana, with commissioning slated to begin before the end of the year, with full production following in 2012. The power-line contract was expected to be awarded in March, so that grid power would be available in July. The company expects the mine to produce 400,000 carats of high-quality stones in its first year.

A feasibility study released last year forecast that the US$120-million AK6 project would generate a net present value (at a discount rate of 8%) of US$164 million and an internal rate of return of 29% over an 11-year mine life.

In February, Lucara closed a private placement of 60 million shares at $1 apiece. The funds will be used at both its operations.

Former African Diamonds managing director was appointed as vice-president, new business, in February, following Lucara’s all-share, $72.3-million takeover of the company in late 2010. African Diamonds was Lucara’s 40% partner at AK6.

Earlier this year, the company was rumoured to be in talks regarding another takeover, this one of Gem Diamonds (GEMD-L). However, in a release, Lucara said that while it speaks with many companies regularly with an eye on identifying growth opportunities, including Gem, it wasn’t in advanced talks with any parties.

Lucara also holds the Kavango joint venture with Namdeb (a partnership of De Beers and the government of Namibia), in Namibia.