Paragon Diamonds: Positive Results From Mothae Study

Mining and Exploration
16/09/2015 12:56

Paragon Diamonds, which has obtained formal approval to complete the acquisition of a 75% interest in, and operatorship of, the Mothae Kimberlite Resource in Lesotho from Lucara Diamond Corporation, has received extremely positive results from two independent studies. According to Paragon's announcement, "The conclusions exceed management’s initial expectations... that Mothae represents a low cost opportunity for Paragon to generate significant value for shareholders through the potential recovery of large high value diamonds. Mothae is only 5 km from the world class Letšeng diamond mine in Lesotho which is located within a cluster of kimberlites, including Paragon’s Lemphane Kimberlite Pipe Project."

The studies suggest the project has the potential for average diamond values up to $2,000 per carat. They also indicated an improved strip ratio of less than 1:1, compared to 1.5:1 previously assumed, which would make the mine more profitable. The reduction in the strip ratio is expected to result in cost savings of $1 to $2 per tonne of ore, compared to original estimates. Shares in Paragon Diamonds climbed almost 6% Tuesday. Paragon still requires funding to complete the acquisition of f a 75% stake in the Mothae project from Canada’s Lucara Diamond.