When the company decided to acquire Mothae, Wetherall says a number of factors were considered. “Lucapa had reviewed a lot of diamond projects but those projects had to be in keeping with our strategy of focusing on large and premium-value diamonds - the market for which remains very strong, with record prices being achieved. “Mothae clearly fits this strategy, which was why Lucapa ran hard at it when the GoL put it up for tender in 2016. The trial mining results produced by the previous owner, Lucara Diamond, clearly demonstrated that, like Letšeng, Mothae also hosted large and premium-value diamonds.
“In addition, many members of Lucapa’s board and management team have operational experience in Lesotho and at the Letšeng mine, so they know and understand the Mothae project in detail. Lucapa’s low-risk, phased development approach and favourable exchange rate movements enhance the economics of developing Mothae,” Wetherall explains. Lucapa’s focus on expanding high-value diamond production from multiple sources is designed to maximise cash generation in a sector of the global diamond market where pricing remains robust. Mothae is located within 5 km of Letšeng, the highest $ per carat kimberlite diamond mine in the world. Trial mining demonstrated Mothae to be a source of large and premium-value diamonds, much like Letšeng.
During the trial mining phase at Mothae, more than 23 000 cts of diamonds were recovered from 600 000 t of processed kimberlite material. This included 96 diamonds larger than 10 cts and individual stones of up to 254 cts. These diamonds were sold for $17 million, with individual stones achieving sale prices of up to $41 500 per carat. Mothae is a well-defined kimberlite with a surface area of 8.8 ha. The pipe has a JORC-classified diamond resource of over a million carats (to a depth of 300 m), at an average modelled diamond value of $1 063 per carat.
The miner has expressed that it believes the Mothae resource has significant upside potential, as the resource has only been calculated to a depth of 300 m (vs 500 m modelled depth of the kimberlite) and does not include any material from the neck zone connecting the southern and northern lobes or the extensive untreated kimberlite stockpiles. Lucapa’s focus on high-value diamond production is designed to protect cash flows in a sector of the diamond market where demand remains robust.
The first diamonds were recovered through the existing bulk sampling plant and infrastructure at Mothae. The site’s bulk sampling programme is designed to provide additional resource and diamond data to expand the life of mine, while also generating early cash flows. “The existing plant and equipment at the Mothae project (70 tph nameplate capacity) had not operated since the trial mining operations conducted by the previous owners, around six or seven years ago. Upon inspection by the Lucapa team, it was decided this equipment could be refurbished at a minimal cost and within a short timeframe to enable a bulk sampling programme to commence in parallel with construction of a new 150 tph commercial plant,” Wetherall states.
Under Lucapa’s Phase 1 development programme, the construction of this new processing plant, which includes an XRT large-diamond recovery circuit, continues and remains on schedule for full commissioning and commercial production in the second half of 2018. With a total employee count for Phase 1 mining at Mothae at approximately 240, including contractors, the project is set to further employ more locals due to its 13.5-year mine life for its first two phases. “However, the bulk sampling programme has the potential to add to the existing JORC resource and thus extend the life of mine, particularly if the extensive neck zone (which has never been tested) can be successfully added into the JORC resource,” Wetherall concludes.