Modern Mining May 2015

MINING News

A view of the Mothae project site in the highlands of Lesotho (Photo: Lucara Diamonds).

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.

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,

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

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 annrobertson@absamail.co.za . She can also be contacted on tel (+27 11) 433-0063. Registration forms can be found on www. sacoalprep.co.za .  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

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

6  MODERN MINING  May 2015