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Paragon's Loss Widens, Revenue Target for 2015 is $36M

Jun 29, 2015 11:21 AM   By Jeff Miller
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RAPAPORT... Paragon Diamonds Ltd. generated a $16 million (GBP 10.3 million) loss in the fiscal year that ended on December 31, up from a loss of just $2 million in 2013. The company  recorded  a $14.5 million noncash impairment charge as a result of divesting from the Motete dyke, a non-core asset.

During the year, Paragon secured a 10-year mining lease at the Lemphane kimberlite project in Lesotho, which is renewable for three consecutive 10-year periods. One test sale of stones that were recovered from a bulk-sampling project achieved values as high as $2,500 per carat, the company stated. Overall, however, the average value forecast for the project is between $930 to $1,025 per carat, eventually generating annual revenue of approximately $9 million to $10 million.

In the current fiscal year, Paragon signed an agreement to acquire the Mothae kimberlite mine in Lesotho from Lucara Diamond Corporation for $8.5 million. Mothae is expected to generate a number of high-value diamonds and  Paragon anticipates generating $60 million a year over a minimum of 12 years of full production.

Lemphane and Mothae  are located in a diamondiferous region in Lesotho, near to the Letšeng mine, and Paragon anticipates one or both of these assets entering the production phase this year, with combined revenue of approximately $36 million.
 
At Mothae, Paragon stated that a sub-resource follows a large-diamond, high-grade mine model and has the potential to host about 15 percent of total carats in excess of 10 carats and 2 percent in excess of 100 carats.  To date, the top values for rough diamonds from Mothae included $31,000 per carat for a 56.50-carat stone and $42,000 per carat for a 28.90-carat diamond; both prices were achieved in December 2011. 

Tags: diamond, Jeff Miller, Lesotho, mining, Paragon Diamonds, results
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