Lucapa Diamond Company’s Mothae Mine Achieves Outstanding Results in Second Diamond Tender, Reinforcing Status as a Premier Producer

Lucapa Diamond Company, an ASX-listed entity, alongside its partner, the Government of Lesotho, has proudly unveiled the robust results from the second diamond tender of 2019. This tender showcased exceptional rough diamonds sourced from the newly operational Mothae kimberlite mine in Lesotho, further solidifying its reputation as a significant player in the global high-value diamond market. The successful tender underlines the strategic vision and operational excellence demonstrated at the Mothae site, promising a bright future for this key mining venture.

The parcel, comprising a total of 7,008 carats of rough diamonds, was offered for sale at a tender held in Antwerp, a renowned global hub for diamond trading. This significant collection of diamonds fetched an impressive total of US$3.5 million, reflecting strong market demand and the inherent quality of Mothae’s production. Individual Mothae gems commanded prices reaching up to an astonishing US$26,000 per carat, a clear indicator of the mine’s capability to yield exceptionally valuable stones. These figures not only highlight the profitability of the operation but also its potential to consistently deliver premium diamonds to the international market.

Mothae’s Consistent Production of High-Value Diamonds

Stephen Wetherall, the Managing Director of Lucapa, expressed immense satisfaction with the latest tender results, emphasizing their consistent reinforcement of Mothae’s distinguished status. “The latest tender results continue to underline Mothae’s status as one of a select few global mines capable of producing high-value diamonds on a consistent basis,” Wetherall stated. This consistency is a critical factor in establishing long-term market confidence and attracting discerning buyers looking for reliable sources of exceptional gems.

Wetherall further elaborated on the encouraging aspects of the mine’s performance, particularly noting the regular recovery of “Specials” – a term used in the industry for large, high-quality diamonds weighing 10.8 carats or more. He highlighted that these impressive recoveries and sales results have been achieved even from areas of the Mothae kimberlite pipe previously considered to be lower-margin. This indicates a robust mineral resource and suggests that the mine’s overall potential may even exceed initial expectations, offering pleasant surprises even in less optimal mining zones.

“We continue to be encouraged by the regular recovery of Specials and sales results achieved from the supposed lower-margin areas of the Mothae kimberlite pipe,” Wetherall added. Such findings provide a compelling narrative of the mine’s geological richness and the effectiveness of Lucapa’s extraction processes. The consistent unearthing of these significant diamonds underscores Mothae’s unique geological characteristics and its capacity to produce stones that captivate the high-end diamond market.

Strategic Transition to Higher-Margin Diamond Zones

Adding to the palpable excitement surrounding Mothae, the mining campaign is strategically preparing for a significant transition. Operations are poised to move into the higher-margin diamond zones located within the main southern pit during the second half of the year (H2). This transition is anticipated to unlock even greater value and further enhance the mine’s profitability, building on the strong foundation laid by current operations.

A key enabler for this strategic move is the meticulous management of water resources. Plans are in place to transfer water from the southern pit to the main dam, a crucial step to ensure appropriate water supplies for planned increased treatment rates during the drier months. This foresight in water management is essential for sustaining efficient operations, particularly as the mine scales up its processing capabilities. The completion of the main dam wall in H2 2019 will facilitate the transfer of the water from the southern pit into the substantial 500,000 m³ water dam, thus securing the necessary resources for heightened activity.

Once this dewatering process is complete, Mothae will gain unrestricted access to the eagerly anticipated higher-margin diamond zones within the southern pit. This access is expected to lead to a significant uplift in the average value per carat and overall revenue generated from future tenders. The strategic delay in dewatering the main southern pit, as outlined in an ASX announcement on May 27, 2019, was a deliberate decision to conserve water. This was critical for enabling the plant to operate at higher throughput rates in H2 2019, ensuring operational continuity and efficiency during a crucial phase of the mine’s development. This careful planning highlights Lucapa’s commitment to sustainable mining practices and maximizing long-term returns.

Impressive Cumulative Sales and Future Tender Prospects

The latest tender results have significantly boosted Mothae’s cumulative sales performance for the year. This brings the total sale proceeds generated from the two tenders of Mothae diamonds completed in 2019 to an impressive US$7.3 million. This substantial figure underscores the mine’s rapid ascent as a valuable asset for both Lucapa and the Government of Lesotho, demonstrating strong commercial viability right from the outset of commercial production.

Analyzing the sales data further reveals an average overall price of US$588 per carat for the run-of-mine production. Even more impressive, diamonds in the +11 sieve size fraction commanded an average price of US$729 per carat. These figures are indicative of the high quality and desirable characteristics of Mothae diamonds, particularly the larger and more sought-after stones. Such robust pricing signals strong market acceptance and a premium valuation for the mine’s output.

Following these consistently strong recoveries from the new 1.1 Mtpa kimberlite plant, Lucapa is actively considering a third tender in the first half of 2019. The decision is buoyed by recent significant finds, including the spectacular 126-carat gem-quality diamond recovered earlier this month, alongside other notable Type IIa Specials. Type IIa diamonds are highly prized for their exceptional purity and often command premium prices, further enhancing Mothae’s appeal in the market. The continued discovery of such prominent diamonds reinforces the mine’s potential to be a world-class producer of large, high-value stones, generating excitement among investors and diamond enthusiasts alike.

The Mothae Mine: A Gem in Lesotho’s Diamond Landscape

The Mothae kimberlite mine is strategically located in Lesotho, a country renowned for its production of large, high-quality diamonds. Lucapa Diamond Company operates Mothae under a 70% ownership stake, with the remaining 30% held by the Government of Lesotho, fostering a strong and mutually beneficial partnership. This collaboration ensures that the economic benefits of diamond mining are shared, contributing significantly to Lesotho’s national development and local communities.

Commercial production at Mothae commenced in January, and despite mining predominantly from lower-margin diamond zones initially, the mine has already demonstrated its significant potential. The deliberate decision to prioritize water preservation for future higher throughput rates showcased a long-term strategic perspective. Kimberlite pipes like Mothae are geological formations that bring diamonds from deep within the Earth’s mantle to the surface. Their exploration and mining are complex endeavors, but when successful, as at Mothae, they can yield extraordinary returns.

The continued success of Mothae places it firmly among Lesotho’s esteemed diamond producers, a nation celebrated for mines like Letšeng, which consistently produces some of the world’s largest and most valuable diamonds. With the transition to higher-grade zones and continued strategic management, Mothae is set to enhance Lesotho’s reputation further as a reliable source of exceptional quality diamonds. The socio-economic impact of such operations is profound, providing employment, infrastructure development, and revenue streams critical for national growth.

Driving Value and Sustained Growth in the Diamond Industry

Lucapa Diamond Company’s proactive approach to exploration, mining, and marketing positions it as a dynamic force in the diamond industry. The company’s commitment to optimizing operations at Mothae, from resource management to strategic mining sequences, is clearly yielding tangible benefits. The transparency and efficiency of the tender process in Antwerp further ensure that Mothae diamonds receive optimal market exposure and achieve fair, competitive pricing, maximizing returns for stakeholders.

The global demand for natural, high-quality diamonds remains robust, particularly for unique and sizable stones. Mines like Mothae, with a proven track record of consistently recovering ‘Specials’ and Type IIa diamonds, are invaluable in meeting this demand. Lucapa’s ability to consistently bring such high-value parcels to market strengthens its position and contributes to a healthy and vibrant diamond trading ecosystem.

Outlook and Conclusion

In conclusion, the second tender results from the Mothae kimberlite mine represent another significant milestone for Lucapa Diamond Company and the Government of Lesotho. The impressive sale proceeds, coupled with the regular recovery of high-value diamonds and the strategic shift towards richer mining zones, paint a compelling picture of Mothae’s promising future. With continued operational excellence, robust resource management, and a focus on maximizing value, Mothae is well on its way to cementing its position as a globally recognized, consistent producer of high-quality, high-value diamonds, driving sustained growth and delivering exceptional returns for all involved.

NewsSource: miningreview