With an average run of mine sale price of >US$2,000 per carat, Lulo represents the world’s highest-value alluvial production.
Kimberlite exploration is undertaken under an exploration licence and Mineral Investment Contract issued by the Angolan Government (through the Ministry of Mineral Resources & Petroleum) which runs until April 2023.
While alluvial diamond mining is conducted through mining company Sociedade Mineira Do Lulo (Lucapa 40% interest and operator; Endiama 32%; Rosas & Petalas 28%), kimberlite exploration is conducted through joint venture company Projecto Lulo (Lucapa 39% interest and operator; Endiama 51%, Rosas & Petalas 10%).
Lucapa funds kimberlite exploration in the form of loans to Projecto Lulo. These loans are repayable to Lucapa when and if kimberlite mining operations are established at Lulo.
In June 2019, Lucapa announced the commencement of the next kimberlite exploration phase at Lulo, based on an extensive technical review of all results to date including those from the 2018 drilling program, which increased to more than 100 the number of confirmed kimberlites within the concession.
Key features of the new Lulo kimberlite exploration phase include:
- An extensive stream bulk sampling program focusing on six major tributaries feeding from high-interest areas into the Cacuilo River upstream of Mining Blocks 8 and 6, where some of the largest and most valuable alluvial diamonds have been recovered at Lulo
- Follow-up delineation drilling of 16 Lulo kimberlite pipes rated most prospective to host diamonds
- Drilling eight additional kimberlite targets, including anomalies highlighted in the technical review demonstrating reversely polarised magnetic signatures
The new kimberlite exploration program will be completed over the next 12 months at a budgeted cost of US$3.3 million. As in the past, Lucapa will fund the exploration costs from a portion of its returns from Lulo alluvial mining company Sociedade Mineira Do Lulo. Exploration thereafter will be results-driven.