PERTH (miningweekly.com) – Diamond miner Lucapa Diamonds will undertake a A$10-million capital raise to fund an expansion of the company’s Mothae kimberlite mine, in Lesotho.

Lucapa MD and CEO Stephen Wetherall on Friday told delegates at the Africa Downunder Conference, in Perth, that the expansion plan for Mothae would increase the project’s capacity from 1.1-million tonnes a year to 1.6-million tonnes a year, at a capital cost of $6-million.

Wetherall noted that the increased production capacity would result in diamond recoveries increasing by some 45%, from 31 000 ct/y to around 44 000 ct/y, while revenue would also increase by 45%, from $21-million a year to around $30-million a year.

“This is a de-risked development. The 1.1-million-tonne-a-year plant is up and running and has been operational for 18 months, so the cost and operational environment is well known,” Wetherall told delegates on Friday.

To fund the expansion, Lucapa has issued a share placement to raise A$10-million.

The company has received firm commitments from professional and sophisticated investors for the placement of more than 181.8-million shares, priced at 5.5c each. The placement will also involve the issue of more than 54.8-million free attaching unlisted options, at 8c each, and expiring two years from the date of issue.

The company on Friday said that more than 157-million shares would be placed under the existing placement capacity, while shareholder approval would be required for the placement of the remaining 24.8-million shares and the options.

The 24.8-million shares subject to shareholder approval is intended to be issued to Safdico International.

“We are extremely pleased with the strong support shown by strategic and institutional investors in the value accretive expansion plan formulated by Lucapa,” said Wetherall.

“The Mothae expansion should see a material increase in the benefits derived by the Basotho nation and our shareholders.”

The expansion of the Mothae operation would happen in parallel with continuing operations, and would be completed by the first quarter of 2021.