Lucapa to restart Mothae diamond mine in coming months

  • The Mothae mine has remained on care and maintenance since March 2020
  • Restart plan approved for recommencement of mining operations
  • New marketing channel approved by the Government of The Kingdom of Lesotho

Government of the Kingdom of Lesotho (“GoL”), are pleased to announce that a restart plan torecommence diamond mining operations at the Mothae diamond mine (“Mothae”) and a new
diamond marketing channel have been approved.

The Mothae mine has remained on care and maintenance since lockdown and isolation measures forced the suspension of operations in late March 2020. The GoL, Lucapa and the Mothae Board of Directors have approved a mine restart plan which will, with the appropriate health and safety protocols implemented, see the mine return to operations in Q4 2020.

In addition, the Honourable Minister of Mines, Minister Qoo, has approved a proposal to implement a new diamond marketing channel that provides Mothae the opportunity to realise more value for its unique high-value production.

Diamond production from the Mothae mine will now be able to be sold at full and transparent rough market value into direct offtake arrangements with diamantaires. This approval will allow Mothae to implement value accretive polishing partnerships with its diamantaire partners where Mothae will see additional benefit accruing in the form of shared polished margins from beyond the mine gate.

This additional marketing optionality, together with an expansion program that could see the Mothae mine production increase by some ~60%, will result in a substantial increase in the mine’s
contribution to all its stakeholders.

The Honourable Minister of Mining, Minister Qoo, stated “We are pleased to have worked closely with Lucapa as our partners in Mothae to see the mine begin its journey back into operation as positive signs begin to emerge for diamonds with the world economies looking to reopen. We also see this new marketing channel as an important additional option to the existing tender solution that will deliver benefit from beyond the mine gate and grow the contribution the natural diamond industry makes to
the Basotho nation.”

Lucapa Managing Director, Stephen Wetherall, commented “It has been a tough time for the industry over the past few months as a result of the pandemic, but particularly for the many men and women employed or engaged at the Mothae mine. Our valued teams and contractors have been very understanding and supportive during the suspension and we look forward to having them back at the mine, in a safe and healthy manner, as soon as possible.”

“Mothae is a unique mine and an important contributor to the Basotho nation. The recommencement of operations and implementation of the new marketing channel will see the full potential of the Mothae kimberlite mine unlocked. This is a similar marketing channel successfully implemented at Lucapa’s Lulo mine in Angola which has already shown its value to the mine.”


ABOUT LUCAPA
Lucapa is a niche diamond producer with high-value mines in Angola (Lulo) and Lesotho (Mothae).

The Lulo alluvial mine and Mothae kimberlite mine both produce large and high-value diamonds, with 75% of revenues generated from the recovery of +4.8 carat stones.

Lulo has produced 15 +100 carat diamonds to date and is one of the highest average US$ per carat alluvial diamond producers in the world. Lucapa and its Project Lulo partners have also received highly encouraging results from their search to discover the primary hard-rock source of the high-value Lulo alluvial diamonds.

The new 1.1 Mtpa Mothae kimberlite mine in diamond-rich Lesotho commenced commercial mining operations in January 2019. It produced > 30,000 carats in its first year of production, including 3 +100 carat diamonds. The mine operations were suspended in late Q1 2020 as a result of COVID-19 lockdown and isolation measures and a recently approved restart plan will see the recommencement of mining operations in Q4 2020.

As a result of the unique high-end nature of the production from Lucapa’s mining operations, the mines utilise strong partnerships with diamantaires to extract polishing margins from beyond the
mine gate.

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