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Lucara Plans to Divest From Mothae Mine
Dec 23, 2014 3:12 AM
By Ronen Shnidman
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RAPAPORT... Lucara Diamond Corp. announced plans to sell its majority stake in the Mothae diamond mine project in Lesotho. While the project held diamonds, all development options for the site had failed to meet the company's investment criteria. The current book-value of the project, along with rehabilitation provision costs, was close to $21 million, according to Lucara's estimates.
"Based on our development strategy and the extensive work conducted on understanding the economics of the Mothae asset, we do not believe that sufficient shareholder value can be gained through the expenditure of current cash reserves on further assessment and development of this project," said William Lamb, Lucara's president and CEO.
He added that the company will continue to focus on its Botswana production and exploration assets while looking for other opportunities to add value to its project portfolio. Lucara's sole operating mine and revenue source is its Karowe mine in Botswana. The company was also awarded two prospecting licenses by the Botswana government in September, which have already been shown to contain diamondiferous kimberlites and are located less than 50 kilometers from the Karowe mine.
Lucara owns 75 percent of the Mothae project, with the remainder held by the government of Lesotho. Lucara said that the government indicated, in discussions with the company, that it was committed to support the project should any potential new owners express interest in it.
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Tags:
Botswana, exploration, Karowe, large stones, Lesotho, lucara, Mothae, prospecting, Ronen Shnidman
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