Lucapa Diamond Company is set to invest AUD 25 million ($16 million) in a production plan for its Merlin mine in Australia, which is expected to yield up to 314,000 carats over the next five years.
The company will implement the restart over two phases, it said Monday. The first portion, which will remove ore from just beneath the surface of five open pits, will take 18 months and cost AUD 15 million ($9.7 million). Output from that phase is expected to be 67,000 carats, valued at $415 per carat, for total revenue of AUD 42 million ($27.3 million). Meanwhile, the second part will use vertical pit mining to extract ore from the Gawain pit. It will take 27 months and cost AUD 10 million ($6.5 million). Revenue from phase two is estimated at AUD 204 million ($132.4 million), from 247,000 carats at an average price of $545 per carat.
Lucapa is currently in talks with several parties to secure funding for the project, it said. The company is looking at various options, including creating offtake agreements, taking on debt, selling a royalty on production, or creating a joint-venture partnership.
The miner has also begun an extensive airborne survey of the site, the first in 25 years, which it believes will turn up further kimberlite pipes as well as base metal deposits.
“We believe our large landholding is highly prospective for more premium-quality diamond deposits and may also host other minerals including base metals, given its proximity to Glencore’s McArthur River zinc and lead mine and the same associated geological structures,” said Lucapa managing director Alex Kidman.
The company will announce the results of the survey in the first quarter of 2025, Kidman added.
Image: The Merlin mine in Australia. (Lucapa Diamond Company)
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