Lucapa Diamond Company Secures Funding and Expands Production Plans at Merlin Diamond Mine

About Lucapa Diamond Company Limited

Lucapa Diamond Company Limited (ASX:LOM) is a leading Australian diamond miner and explorer with a strong portfolio of assets in Africa and Australia. The company holds significant interests in two high value producing diamond mines: Lulo in Angola, where it owns 40%, and Mothae in Lesotho, with a 70% stake. Both mines are renowned for producing large, premium diamonds that command some of the highest prices per carat globally. Lulo has been in commercial production since 2015, while Mothae began operations in 2019.

In 2021, Lucapa made a strategic acquisition of the Merlin Diamond Project in Australia through its wholly owned subsidiary, Australian Natural Diamonds Pty Ltd. Additionally, the company is actively exploring for primary source kimberlites and lamproites at key projects, including Lulo, Brooking in Australia, and Orapa Area F in Botswana. Lucapa’s board, management, and key stakeholders bring deep expertise and global networks across the diamond value chain, from exploration to retail.

Strategic Developments

Lucapa Diamond Company Limited, an Australian diamond miner and explorer, has announced the successful securing of a $1 million short-term loan facility. The funds will be strategically deployed to support key exploration initiatives, specifically an airborne electromagnetic survey of the highly prospective Merlin tenement area, as well as to assist with general working capital requirements pending the receipt of a SML dividend. This financial move highlights Lucapa’s commitment to advancing its Australian and international diamond projects while maintaining operational liquidity.

The $1 million loan facility is a crucial part of Lucapa’s ongoing efforts to further its exploration and mining activities, particularly at the Merlin Diamond Project, located in the Northern Territory of Australia. The project, which Lucapa acquired through its wholly owned subsidiary, Australian Natural Diamonds Pty Ltd, in 2021, holds significant potential for the discovery of new diamond resources. The funds will specifically go towards conducting an airborne electromagnetic (AEM) survey over the Merlin tenement area, which is considered highly prospective for new diamond-bearing kimberlite pipes.

In addition, Lucapa is set to revitalize the Merlin Diamond Mine with a two-phase production plan. The company aims to produce a total of 314,000 carats, which is expected to generate revenue of approximately A$246 million. To fund the project, Lucapa is currently in discussions with various investors for the required A$25 million. This revitalisation of the Merlin mine represents a significant step forward in Lucapa’s growth strategy, as the project is expected to add considerable value to its operations and production base in the Northern Territory.

Opportunities for Growth: Unlocking Value at Merlin and Beyond

Lucapa’s focus on the Merlin project represents a significant growth opportunity for the company. The Merlin Diamond Project has a rich history of diamond production, with previous mining activity indicating the presence of high-quality diamonds in the area. The current exploration programme aims to tap into this potential, with the aim of discovering new kimberlite pipes and expanding the resource base at Merlin.

The two-phase production plan for Merlin is designed to unlock the full potential of the site. With an expected output of 314,000 carats and a projected revenue of A$246 million, the plan is set to significantly boost Lucapa’s revenue streams and strengthen its position in the diamond industry. The capital required for this project, A$25 million, will be sourced through ongoing investor discussions, demonstrating strong interest and confidence in the company’s potential.

Lucapa’s ability to leverage its existing assets while exploring new opportunities in Australia and Africa demonstrates the company’s strategic vision and its commitment to expanding its global footprint. By focusing on both exploration and production, Lucapa is well-positioned to benefit from the continued demand for high-quality diamonds, which remain a sought-after commodity on international markets.

Financial Stability and Flexibility

The short-term loan facility will also provide Lucapa with the necessary liquidity to cover general working capital requirements. This funding will ensure that operations continue smoothly and without disruption. The loan reflects Lucapa’s proactive approach to maintaining financial stability while pursuing long-term growth opportunities across its portfolio of diamond assets.

Lucapa’s management has consistently demonstrated a disciplined approach to capital management, balancing the need for exploration investment with operational efficiency. The loan facility will enable the company to continue pursuing its strategic goals without compromising its financial position. The company’s board and management bring extensive experience and networks across the global diamond industry, positioning Lucapa to maximise value from both its existing and future projects.