TORONTO (miningweekly.com) – Vancouver-based junior Lucara Diamond Corp has been granted a ten-year diamond-mining lease for its Mothae project, in Lesotho, and now plans to start preproduction test mining to better understand the kimberlite, the firm said on Monday.

The lease was approved after Lucara and the government of Lesotho finalised a mining agreement, which provides for the State to hold 25% of the Mothae project, with the balance owned by Lucara.

One half of the project interest held by the government (or 12,5% of the project interest) will be a free carried interest and the other half will be funded by the government through its share of project dividends.

During an initial preproduction test mining stage, a royalty of 4% of the sales value of diamonds produced from Mothae will be payable to the government and at full production the royalty will increase to 8% of diamond sales value.

“This is a major step forward for the Mothae project,” commented Lucara president William Lamb.

“Having secured the mining lease, we can now move forward with plans for pre-production test mining which are designed to increase our confidence in the economic potential of the Mothae kimberlite through the validation of diamond grade and value information that was generated in the recently completed bulk sampling program.”

The Mothae kimberlite pipe, in northeast Lesotho, is a large (8,8 ha surface area) low grade kimberlite.

Lucara completed a 100 000-t bulk sample in April 2009 which yielded an average stone size of 0,44 ct per stone and a sample grade of 4,7 ct per 100 t.

A diamond valuation exercise completed in June modelled a diamond value for Mothae of $549/ct.

Bulk sample information, together with preliminary delineation drilling and geologic modelling work completed to date by Lucara has resulted in an estimated tonnage potential of between 25-million and 35-million tonnes and an estimated in situ grade potential of between 3 ct and 4 ct per hundred tons.

These are still preliminary estimates though, and more work is needed to define a mineral resource on the property.

A conceptual mining study to develop the Mothae kimberlite to full production at a rate of 2,5-million tons a year has been completed and will be updated to a feasibility level if positive results are obtained during the preproduction test mining phase, the company said.

Lucara plans to test mine up to 720 000 t of kimberlite from the upper weathered zone of the Mothae kimberlite over a 24 month period, in an effort to validate current diamond grade and value estimates.

The company will upgrade its processing facility to include a recovery system for larger (greater than approximately 30 ct) diamonds, enhanced water treatment and management systems along with a new recovery plant and sorthouse.

The processing facility upgrade is expected to be completed by February 2010.

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