Lucapa Diamond Company has announced plans to invest AUD 25 million ($16 million) in a new production plan for its Merlin mine in the Northern Territory, Australia. The project aims to produce up to 314,000 carats of diamonds over the next five years.
The investment will be rolled out in two phases, the company revealed on Monday. The first phase will focus on extracting ore from five open pits, located just beneath the surface. This phase, set to last 18 months, will cost AUD 15 million ($9.7 million) and is expected to yield 67,000 carats. The diamonds are projected to fetch an average price of $415 per carat, bringing in a total revenue of AUD 42 million ($27.3 million).
The second phase will involve vertical pit mining at the Gawain pit. This phase will take 27 months to complete, costing an additional AUD 10 million ($6.5 million). The company estimates that phase two will generate revenue of AUD 204 million ($132.4 million) from the extraction of 247,000 carats, at an average price of $545 per carat.
To fund the project, Lucapa is currently negotiating with several parties. The company is exploring a variety of funding options, including offtake agreements, debt financing, royalty sales, and potential joint-venture partnerships.
Additionally, Lucapa has started an extensive airborne survey of the Merlin mine site, the first of its kind in 25 years. The company hopes the survey will uncover new kimberlite pipes and possibly base metal deposits.
Alex Kidman, Lucapa’s Managing Director, expressed optimism about the potential for further discoveries. “We believe our large landholding has great potential for more high-quality diamond deposits and could also host other minerals, such as base metals, due to its proximity to Glencore’s McArthur River zinc and lead mine,” he said.
The company expects to release the results of the airborne survey in the first quarter of 2025.
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