MOTHAE KIMBERLITE PROJECT

In 2017, Lucapa secured a 70% interest in the advanced, high-value Mothae kimberlite project through an international tender run by the Government of the Kingdom of Lesotho (GoL), which retains a 30% interest.

Lucapa is on track to commence commercial production at Mothae in H2 2018 to complement the high-value diamond production from Lulo.

In addition, Lucapa has refurbished the existing plant and infrastructure at Mothae to commence a bulk sampling program, the first diamonds from which were recovered in February 2018.

As part of the acquisition, the GoL has issued a new 10 year mining licence for Mothae, which has an automatic right of renewal for a further 10 years.

Mothae is located within 5km of Letseng, the highest $ per carat kimberlite diamond mine in the world.  Like Letseng, trial mining has demonstrated Mothae to be a source of large and premium-value diamonds.

During the trial mining phase at Mothae, more than 23,000 carats of diamonds were recovered from ~600,000 tonnes of processed kimberlite material. This included 96 diamonds larger than 10 carats and individual stones of up to 254 carats. These diamonds were sold for US$17 million, with individual stones achieving sale prices of up to US$41,500 per carat.

Mothae is a well-defined kimberlite with a surface area of 8.8 hectares. The pipe has a JORC classified diamond resource of +1 million carats (to a depth of 300m) at an average modelled diamond value of US$1,063 per carat (Refer ASX announcement 24 March 2017).

Lucapa believes the Mothae resource has significant upside potential as the resource has only been calculated to a depth of 300m (v 500m modelled depth of the kimberlite) and does not include any material from the neck zone connecting the southern and northern lobes or the extensive untreated kimberlite stockpiles.

The economics of developing Mothae have been enhanced significantly by favourable exchange rate movements and the adoption of a staged, low-risk development plan.