JOHANNESBURG (miningweekly.com) – Lucara Diamond Corporation has agreed to extend the exclusivity agreement with Aim-listed Paragon Diamonds regarding the proposed acquisition of Lucara’s Mothae kimberlite resource and the Lemphane kimberlite pipe project, in Lesotho.
This would allow Paragon to complete its $15-million funding package with Acrux Resources.
Upon completion of the financing, Paragon would pay Lucara, which reserved its rights to terminate exclusivity based on any deviation from the payment schedule, an initial $2-million of the $6.5-million due.
Lucara had further agreed an extension to the short-term £500 000 loan facility to November 18 for the proposed Acrux funding package to be executed.
If Paragon repaid the loan after October 14, it would issue the provider a further 3.57-million detachable call warrants with a strike price of 7p apiece.
Lucara believed the extensions placed the company in a good position to execute its strategy and complete the acquisition of Mothae on the terms previously announced.
“Both Acrux and Paragon are committed to concluding the funding arrangements as soon as practicable.
“The company is progressing activity at both Lemphane and Mothae and there should be no delays in bringing plant and other equipment, including the use of two technologically advanced X-ray transmission machines to site.
“We currently have no plans to procure additional funding to start production nor to cover existing overheads,” commented Paragon FD Simon Retter.
He added that, with the reduction in the purchase price for Mothae, revised terms of payment with Lucara, and other working capital and capital expenditure efficiencies identified, the company was well placed to deliver on its strategy.
“Our mining plan at Mothae has been independently reviewed and indeed improved on our original estimation of the economics of the project.
“We have also secured a letter of commitment for funding for the majority of stage two financing for both projects . . . [and] the board believes Paragon is now in an exceptionally strong position and looking forward to production in 2016 at both assets,” he noted in a statement.