PERTH (miningweekly.com) – A new development plan for the Mothae kimberlite diamond mine, in Lesotho, has significantly improved project economics, ASX-listed Lucapa Diamonds reported on Monday.
Lucapa’s initial plans for the Mothae project would have seen the company 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, under Phase 1, which was expected to cost $12-million to develop.
The Phase 2 development, which was expected to cost a further $79-million, had been anticipated to produce at a rate of two-million tonnes a year, would only have been implemented once Phase 1 has been fully commissioned.
However, Lucapa said on Monday that a review of the development plan for Mothae, and optimising of the pit designs to maximise targeted diamond production and cash flow, had resulted in new operational parameters for the mine.
The new mine plan was expected to result in a 29% increase in gross project revenues to $776-million, a 26% increase in net operating cash flows to $312-million, a 22% increase in diamond production to 498 000 ct, and a 30% increase in kimberlite material mined, to 25-million tonnes.
Further, a 12% increase was expected in the project’s mine life, taking it to 13.5 years, while a 31% increase was also expected in the project’s net present value, to $85-million.
Lucapa told shareholders that the improvements stemmed primarily from increasing the size of the Phase 1 diamond plant from 100 t/h to 150 t/h and pit optimisation reviews.
The targeted mining and treatment period under Phase 1 remained unchanged, at around 34 months, with first production targeted for the second half of 2018.
The miner also noted that the larger Phase 1 plant could also be used more completely in the proposed Phase 2 development plan, under which a second 150 t/h module would be installed in parallel to the Phase 1 plant, to achieve the targeted 300 t/h Phase 2 throughput.
Under the new mine development plan, Phase 1 of the project was expected to cost $17-million, of which $1.5-million had already been funded to date.
Lucapa has also secured a $15-million facility to fund the Phase 1 development from Equigold, with the Lesotho government also agreeing to assist the company with additional up-front investment by deferring the remaining consideration payments due from Lucapa on the $9-million purchase price of the company’s 70% interest in Mothae.