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Paragon’s Deal With Lucara to Acquire Mothae Mine Terminated
Dec 20, 2015 2:03 AM
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RAPAPORT... Paragon
Diamonds reported its agreement with Lucara Diamond Corporation to acquire the
Mothae Kimberlite Resource in Lesotho has been terminated.
Mothae is “highly synergistic” with Paragon’s Lemphane Kimberlite Pipe
Project, also in Lesotho, the company said in a statement December 14 in
response to the termination notice. The miner “will negotiate directly with the
Government of Lesotho, which controls the definitive approval on any
transaction in respect of developing Mothae, and will update the market
accordingly on progress made,” it said in the statement.
Lucara said in an e-mail to Rapaport
News December 17 it is working with the Government of Lesotho and a “third
party” to effect the transfer of its Mothae holding “to a party who will rapidly
develop the asset.”
Finalizing
funding for Paragon to implement its development strategy “remains an ongoing
process,” the statement said. “The conclusion of a financing package has
taken longer than anticipated. This is on account of the board’s
reluctance to materially discount the potential value of the company and dilute
existing shareholders.”
The board believes “the
termination of the agreement with Lucara will not have material impact on the
terms of any such funding.”
Paragon, listed on
the UK’s Alternative Investment Market, requested November 16 trading in its
shares be suspended because of uncertainty about its financial position and
negotiations with lenders over funding for the Mothae deal.
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Tags:
, Lesotho, Lucara Diamond Corporation, mining, Mothae Kimberlite Resource, Paragon Diamonds
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