MOTHAE Diamond Mine has embarked on expansion drive to increase its processing plant capacity from the current 1, 1 million tonnes of ore per annum (Mtpa) to 1, 6 Mtpa.
The expansion programme is expected to be completed by the end of March 2021.
Mothae Mine is located close to the high dollar-per carat gem producer, Letšeng Diamonds in Mokhotlong. It was put up for sale by the government in February 2016 after prospective buyer, Paragon Diamonds Limited, failed to secure the requisite funding within the given time frame.
In April 2017, the government awarded mining rights to the Australia-based Lucapa Diamond Company to develop the mine which had been idle since 2015. It cost Lucapa US$9 million to acquire a 70 percent stake in the Mothae Mine. The government owns the remaining 30 percent share in the mine.
The mine only began full scale commercial operations in January 2019 and has now begun an expansion drive aimed at increasing output and revenue over the next few years.
In a statement to the Sunday Express, Lucapa managing director Stephen Wetherall said the company Lucapa and the government had agreed “to commence a value accretive expansion of the processing plant from 1, 1 Mtpa to 1, 6 Mtpa”. Mr Wetherall said the expansion programme kicked off towards the end of last year.
“This (expansion) will lead to a 45 percent increase in annual recovered carats and revenue. It is expected to generate an estimated US$67m over six years.”
Mr Wetherall said the expansion was being financed through the issuance of shares to some investors.
“During the fourth quarter of 2020, the company completed a successful placement of shares, raising 10 million Australian dollars (A$10m or about M115, 8 million) primarily for the 45 percent expansion of the Mothae mine processing capacity from 1, 1 Mtpa to 1, 6 Mtpa. The shares were issued in two tranches, with the second tranche being approved at the general meeting on 17 December 2020.
“On 12 November 2020, shareholders approved the issue of shares and options to New Azilian Pty Ltd. On 17 December 2020, shareholders approved the second tranche of the A$10m placement and ratified the prior issue of shares under the Australian Stock Exchange listing rules.”
Mr Wetherall further said the diamond mining sector continues to “rebound strongly” from the Covid-19 induced slowdown in business activity.
He said diamond prices were returning to pre-pandemic levels, “following a tough 2020 where the diamond market all but stopped”.
“We look forward to 2021 with great optimism following a strong final 2020 quarter from our two mines (Mothae and Lulo Mine in Angola) particularly as the sector continues its positive momentum.
“The expansion of our Mothae mine will enhance returns expected to flow to Lucapa this year from both our operations and the kimberlite bulk sampling programme at Lulo continues to demonstrate its prospectivity,” Mr Weatherall said.
He said its processed tonnage declined by nine percent due to the six-months’ suspension imposed during the first lockdown in Lesotho in March 2020.
“Following a six months’ suspension to mining operations forced by the pandemic in March 2020, Mothae successfully recommenced mining and treatment operations during the fourth quarter.”
Mr Weatherall said Mothae produced 6603 carats during the fourth quarter of 2020 including 124 diamonds bigger than 4, 8 carats.
“The 101-carat D-colour gem recovered is the fourth over 100-carat diamond recovered since commercial production commenced in January 2019. This is Mothae’s most valuable diamond ever recovered,” he said.