Modern Mining May 2015

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6MODERN MINING May 2015
MINING News
Pa r agon D i amond s L imi t ed , t he
AIM-quoted diamond development
company, has signed a Memorandum
of Understanding (MOU) with Lucara
Diamond Corporation, a TSX-quoted min-
ing company, to acquire a 75 % interest in
and operate the defined Mothae kimber-
lite resource. Mothae is located only 5 km
from the world-class Letšeng diamond
mine in Lesotho.
According to Paragon, Mothae rep-
resents a low-cost opportunity for the
company to generate significant value
for shareholders through the recovery
of additional large high value diamonds
in tandem with the commencement of
Stage 1 production at Paragon’s nearby
Lemphane kimberlite pipe project.
Mothae adds indicated/inferred
resources of 39 Mt at 2,7 cpht at US$1 060/ct
Biennial coal processing conference
The Southern African Coal Processing Society
(SACPS) biennial conference is to be held
from 25-27 August 2015 at the Graceland
Hotel Casino and Country Club in Secunda.
Peter Bethell and Ernst Venter have
committed to keynote addresses and will
be joined by international presenters from
India, Germany and Finland. The event will
have sponsored networking booths run-
ning under the banner of Coal Africa.
The conference is registered with the
Engineering Council of South Africa (ECSA),
and is awarded 3 CPD points for the full
conference or 1 CPD point per day. Each
delegate will receive a copy of the new Coal
Preparation Handbook, due for launching at
the conference.
Details are available fromAnn Robertson
at . She can
also be contacted on tel (+27 11) 433-0063.
Registration forms can be found on www.
sacoalprep.co.za. 
Paragon to acquire Lesotho’s Mothae diamond project
to Lemphane’s 48 Mt of kimberlite under
evaluation and development. Developing
Mothae and Lemphane concurrently will
allow Paragon to benefit from significant
economies of scale resulting in cost sav-
ings for equipment, management and
services. Paragon says it expects combined
revenues of approximately US$36 million
in the first year of full production based on
current resource estimates.
An existing processing plant and
related infrastructure at Mothae is part of
the acquisition cost. It will be upgraded
at a cost of approximately US$5 million,
which will allow initial mining of 0,75 Mt/a,
rising to 2 Mt/a within two years. Upgrade
works are due to commence as soon as the
acquisition is closed which is expected to
be in Q2 or early Q3 2015.
“This hugely important acquisition
re-rates and simultaneously de-risks
Paragon’s business model, and elevates us
overnight into an important and sizeable
diamond company,” comments Paragon’s
Executive Chairman, Philip Falzon Sant
Manduca. “Our Dubai-based partners,
ITGT, have agreed to provide the entire
funding, for both Lemphane and Mothae,
of approximately US$28 million, to allow
us to accelerate the combined production
schedules of both assets. I do not expect
any undue delay in signing the acquisition
contract, as the Lesotho Government has
been informed of the intended acquisition
at every step of the process, intensively so
in the last two weeks, and is encouraging
a rapid commencement of the production
schedule, which suits all of us.
“Mothae is the perfect fit for Paragon
at this stage of our growth and business
development. We have agreed to incorpo-
rate the entireMothae senior andmid-level
Lesotho-based management teams into
Paragon within our Lesotho subsidiary,
Meso Diamonds. This should ensure conti-
nuity along with the efficient recruitment
of experienced and proficient profession-
als, and adds immense depth to our local
capabilities both with the relationship with
the Government of Lesotho, as well as in
all the critical administrative and budget-
ary matters with mining.”
Production can be re-established at
minimal cost within a four-month period,
A view of the Mothae project site in the highlands of Lesotho (Photo: Lucara Diamonds).