Lucapa Diamond Company announced that it has commenced drilling at its 80% owned Brooking diamond project in Western Australia’s Ellendale lamproite diamond field with the aim of identifying the primary hard-rock source of the diamonds and lamproite indicator minerals recovered from field sampling programmes earlier in the year.

The Company will take up a 19-hole drilling programme and test a series of conductive targets potentially associated with lamproite, a host source for diamonds. In addition, Lucapa is also conducting further reconnaissance sampling and mapping programmes at the site.

A day earlier, the Company had also released an optimised development plan for its Mothae project in Lesotho which results in 10-25% increases in targeted production, cash flows and mine life. In the statement, Lucapa also said that it has finalised a US$ 15m funding facility for Phase 1 which will be augmented by the Government of Lesotho agreeing to defer the remaining US$ 4.5m Mothae acquisition payments.

The new mine development plan, with first production scheduled for early H2 2018, will result in :

• A 29% increase in gross project revenues to US$ 776 million

• A 26% increase in net operating cash flows to US$ 312 million

• A 22% increase in diamond production to 498k carats

• A 30% increase in kimberlite material mined to 25 million tonnes

• A 12% increase in mine life to 13.5 years (notwithstanding higher Phase 1 throughput)

• A 31% increase in modelled pre financing project NPV to US$ 85 million (range of US$ 55 million-US$ 151 million)

The improvements in targeted kimberlite to be mined, carat production, net cash flows and mine life are derived primarily from increasing the size of the Phase 1 diamond plant from 100 tonnes per hour  to 150 tph and pit optimisation reviews, Lucapa said.

Phase 1 is budgeted to cost US$ 17 million, of which approximately US$ 1.5 million has already been funded by Lucapa to date. In addition to the Company’s cash resources, Lucapa has secured a US$ 15 million facility to fund the Phase 1 development from Equigold Pte Ltd, a company associated with prominent Singaporean-based resources investor Simon Lee AO.

The government has - as a result of the increased direct foreign investment into Lesotho from the new mine development plan - agreed to assist Lucapa with the additional up-front investment by deferring the remaining consideration payments due on the US$ 9 million purchase price of the Company’s 70% interest in Mothae. The pending US$ 4.5 million which was to be paid in eight monthly instalments starting in October 2017 (the rest has already been paid) has been deferred, and will now commence in June 2018, the Company said.

Lucapa Managing Director Stephen Wetherall said, “We now look forward to bringing Mothae into production early in the second half of 2018 to add a high-value kimberlite production source to our exceptional Lulo alluvial production.”