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RAPAPORT... Paragon Diamonds Ltd. agreed to buy the Mothae kimberlite processing plant in Lesotho from Lucara Diamond Corporation through its subsidiary Meso Diamonds. Paragon Diamonds expects to relocate the plant in the first quarter of 2014 after minimal site preparations at its Lemphane project.
Under the terms of the agreement, Meso Diamonds will pay Lucara Diamond a consideration of $1.15 million, comprised of $50,000 cash and $400,000 in new Paragon Diamonds shares at a price of 5.5 pence per share upon signing the asset purchase agreement, followed by $200,000 cash and $500,000 in new Paragon Diamonds shares at a price of 5.5 pence per share on completion of the plant's relocation. Paragon Diamonds plans to initiate a first stage of production by the third quarter of 2014, covering a two year period and recovering at least 20,000 carats at an estimated average value of $750 per carat.
Stephen Grimmer, Paragon Diamonds' managing director, said, “We are delighted to be acquiring Mothae Diamonds’ processing plant from Lucara. Not only is it perfect for our needs but it is also in close proximity leading to much reduced costs for the company, with further cost savings and support coming through the acquisition being mostly satisfied in Paragon Diamonds shares. “Together with the existing infrastructure at Lemphane and a very experienced team of contractors with whom we have long-term working relationships, this should allow us to deliver a robust and low-cost mining program in the shortest possible time,” he said.
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