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Lemphane mining lease agreement finalised

25th February 2014

By: Leandi Kolver

Creamer Media Deputy Editor

  

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JOHANNESBURG (miningweekly.com) – Aim-listed Paragon Diamonds on Tuesday announced that its 85%-owned Lesotho subsidiary Meso Diamonds had finalised the terms and conditions of the mining lease agreement with the Lesotho government for the mining of the Lemphane kimberlite pipe in Lesotho. 

The remaining 15% of Meso Diamonds was held by local Basotho shareholders and, according to the mining lease agreement, the Lesotho government now held an additional 20% in the project.

The finalising of the lease agreement enabled the company to initiate preparations for and start Stage 1 production at Lemphane, Paragon said in a statement.

Stage 1 of the project’s two-stage production programme targeted the mining of 500 000 t/y to recover an expected 10 000 ct/y at a minimum average value of $750/ct.

The first production stage, which was scheduled to run for two years, also intended to produce a maiden inferred resource for the project as well as a definitive feasibility study for Stage 2 mining.

"We are delighted that the terms of the mining lease for Lemphane have now been finalised. Having previously recovered stones of up to 8.9 ct with values in excess of $2.400/ct, we have already demonstrated Lemphane's potential to yield large high-value diamonds,” Paragon chairperson Martin Doyle said. 

The mining lease was granted for an initial ten years and would be renewable for three consecutive ten-year periods subject to the terms of Lesotho’s Mines and Minerals Act.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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