PERTH (miningweekly.com) – Diamond miner Lucapa Diamond Company has secured A$19-million in capital to fund the acquisition and development of the Mothae kimberlite diamond project, in Lesotho.

The ASX-listed miner said on Friday that the funding package included a A$9.2-million underwriting agreement with Westar Capital for 46.2-million listed options, priced at 20c each, due to expire at the end of September this year. Westar will earn a 5% underwriting fee and a 1% management fee, due on signing.

The package also included a A$5.5-million, six-month secured bridging loan facility with First Class Securities, and the issue of 11.6-million unlisted options, priced at 35c each, to Westar, which will expire 12 months from issue.

The fee options are expected to be issued at the end of September, and if exercised, will generate additional cash proceeds of around A$4.1-million for Lucapa at a time when the company will start studies for the two-million-tonne-a-year, Phase 2 development of Mothae.

Lucapa MD Stephen Wetherall told shareholders that the funding package, combined with the company’s existing cash resource, would enable Lucapa to meet its staged payment schedule to acquire a 70% interest in Mothae from the government of Lesotho, and to further Phase 1 development.

Under Phase 1, Lucapa will process some two-million tonnes of mainly weathered, near-surface kimberlite material at a rate of 720 000 t/y, over the first three years of operation. The Phase 2 development plan will only be implemented once Phase 1 has been fully commissioned.

Wetherall said Lucapa was able to commit to developing Mothae because the 8.8 ha kimberlite pipe had been well defined through drilling and trial mining, which produced more than 23 000 ct of diamonds, including individual stones of up to 254 ct and Type IIa diamonds, which achieved sale prices of up to $41 500/ct.

Lucapa has to pay $9-million for its 70% interest in the project, which is located near Gem Diamonds’ Letšeng mine.

Mothae used to belong to Canadian junior Lucara Diamond Corporation, but the miner put the project up for sale in 2015. Junior developer Paragon Diamonds was interested in acquiring a 75% interest in Mothae, but a final agreement was never concluded.