Africa Mining: Lucapa secures $7m loan to boost Lesotho mine development

Australia’s Lucapa Diamond (ASX:LOM) said Thursday it had received ZAR100 million (about $7 million) from South Africa’s IDC — of the largest development financiers in southern Africa —  to boost development at its 70%-owned Mothae mine in Lesotho.

The company, which commissioned a 1.1 million tonne a year treatment plant at the mine, said the loan will considerably strengthen Mothae’s cash position.

News comes as the company is in the midst of getting its 70%-owned Mothae mine ready for commercial production.

The news comes as the company is in the midst of getting the mine, in which the Lesotho government hold a 30% stake, ready for commercial production.

Lucapa expects to see its first for-sale diamonds from the mine in early November and plans to increase production to its intended levels during the fourth quarter.

Lucapa has already exported about 2,500 carats of rough diamonds to Antwerp from its recent bulk sampling. It plans to ship the remainder of the 4,100 carats to the Belgian city ahead of the first scheduled sale in the fourth quarter.

Mothae’s former owner, Lucara Diamond, achieved sale prices of up to $57,000 per carat during trial mining between 2008 and 2012, Lucapa said. During that process, Lucara recovered approximately 23,400 carats, including 96 individual stones over 10 carats and one 254-carat stone.

The Mothae project is located within 5 km of Gem Diamonds’ (LON:GEMD) Letšeng mine, which in February yielded a 910-carat rock, the fifth biggest gem-quality diamond ever found.