Africa Mining: Lucapa eyes up London listing

CEO Stephen Wetherall with the latest special from Lulo (MJ)

ASX-listed Lucapa Diamond Company is considering joining other Africa-focused diamond miners by listing in London, as it looks to broaden its wingspan both corporately and organically from its base in Angola.

The strategic change of gears aims to take advantage of the company’s strong cash position.

Revenues to date for 2016 are already up 240% compared to a year ago and diamond recoveries in July hit record levels from Lucapa’s 40%-owned flagship alluvial diamond mining operations at the 3,000km2 Lulo diamond concession. The company is also expanding its search for the primary kimberlite sources at Lulo.

Lucapa chief executive Stephen Wetherall told the Paydirt Africa Down Under conference this week total revenue of US$32 million had already been generated this year from sales of some 10,200 carats, with distributions already made to the participating partners in Lulo.

Lucapa partners with Angola’s national diamond company (32%) and private group, Rosas & Petalas (28%) at Lulo.

Average monthly operating cash costs had been kept to about $1.3 million from throughputs of 20,000m3 a month.

“We have significant new investment taking place at Lulo with a new wet front end plant installed in recent weeks and new x-ray flow sort technology imminent to lift recovery rates for coarse material particularly,” Wetherall said.

“The new plant, which includes more secure recovery and cleaning facilities, will also allow the recovery of diamonds of up to 1,100ct and should be commissioned shortly.”

He said Lucapa was focused on high priority kimberlite targets on the concession with a recently launched drill programme and was exploring options to increase its shareholdings in Lulo.

M&A was said to be on the table as a consideration for capital allocation and to leverage share price improvement, though Wetherall declined to share any specifics on potential targets.

The company was also checking out the merits of an AIM exchange listing in London, which would place it alongside most other Africa-focused diamond miners and theoretically make it more visible to investors interested in the space.

Lulo is 150km down the road from the Alrosa-operated Catoca mine, the world’s fourth biggest kimberlite diamond mine, and on the same geological trend.

Lucapa recovered an exceptional 404ct Type IIa D-colour diamond early this year, the biggest ever recovered in Angola, which later sold for $16 million. The recovery of large pink diamonds this year has increased the likelihood of further ‘specials’ being recovered from Lulo.(Source: Mining Journal)

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