Lucapa Diamond Company has posted a maiden JORC resource estimate for the Mothae Kimberlite Diamond Project located in the southern African country Lesotho, and has updated its JORC diamond resource for the Lulo Diamond Project in Angola. The maiden Mothae JORC estimate is over one million carats of diamonds with an average modelled value of $1,063 per carat, while the Lulo report notes a 10% increase in volume over the maiden Diamond Resource and a 54% increase in average modelled value to $1,246 per carat, though the grade fell from 9.27 carats per 100 cubic metres (cphm). The JORC continues to infer +4 years of alluvial mining operations at the rate of 20,000 bulk cubic metres per month, even after 15 months of mining depletion.
At Mothae, which Lucapa plands to bring in to production in 12 months, the total Indicated and Inferred resource is 38.96 million tons at a diamond grade of 2.7 carats per 100 tons for 1.04 million carats of diamonds. Known recoveries of high-value Type IIa diamonds at Mothae contribute to an average modelled JORC diamond value of $1,063 per carat. Potential exists for higher average US$ diamond prices highlighted, based on large diamond recoveries. Expansion opportunities exist as the Mothae kimberlite pipe has been modelled to 500 metres depth, however the JORC resource calculated for first 300 metres only. Lucapa is in the process of advancing the acquisition of an interest in Mothae. They signed an agreement with the government to acquire a 70% interest in Mothae Diamonds Limited (MDL), which holds the mining licence and other assets related to Mothae, and were issued a 10-year mining licence. Lucapa has paid the first $400,000 payment for its 70% interest in MDL. On receipt of the physical share certificate, which is expected shortly, Lucapa will have 60 days from that date to make the second payment of $4.1 million.
At Lulo, the updated JORC inferred resource came in at 660,000 bulk cubic metres – a 10% volume increase – grading 7.95 carats per hundred cubic metres. They also upped the average price assumptions by 54% to $1,246 per carat following an average gross sales price of $2,983/ct in 2016. According to Mining Journal, research department Somers & Partners said in a note it had been confident of the resource upgrade and was not surprised by the price assumption improvement, however, it had been using a higher grade assumption in its modelling, which would therefore need to addressed. "The assumed average grade of the resource has fallen and is lower than our modelled assumption," Somers mining and metals director Duncan Hughes said. "This is reportedly due to areas within the new resource of reduced sampling density rather than a geological control per se. However, the reduced grade assumption will reduce our valuation slightly for Lulo. Should grades remain in-line with recent production grades, this can be viewed as upside on our model."
JORC = Australasian Joint Ore Reserves Committee Code