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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.
Tags: , Lesotho, Lucara Diamond Corporation, mining, Mothae Kimberlite Resource, Paragon Diamonds
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