Paragon Diamonds Confirms 'Exciting Economic Potential' at Lesotho Mine

A new report has revealed that mining of the Lemphane Kimberlite Pipe Project in Lesotho will unearth some very large diamonds.

Paragon Diamonds Ltd, the company behind the project, has revealed details from an Independent Modelling Report which revealed a +100 carat diamond is expected for every million tonnes processed.

The AIM quoted company commissioned The MSA Group, and internationally recognised authority Dr Johannes Ferreira to undertake a size frequency and revenue modelling report to independently verify the Company’s in-house estimates.

Dr Ferreira has previously studied other large diamond size, exceptional value but low grade diamond deposits, including the Mothae kimberlite in Lesotho, Lucara Diamond Corp’s Karowe Mine in Botswana, and DeBeers’ Victor Mine in Canada.

The report was based on 300 carats of diamonds recovered from a bulk sampling programme of over 15,000 tonnes of kimberlite at Lemphane, which was concluded in June 2013.

It stated that diamond values are projected at between US$930/carat and US$1,025/carat which will be verified during Stage 1 production and the size frequency indicated that 12 percent of carats as diamonds exceeding nine carats.

Based on the results of the report, Stage 1 production is expected to recover in excess of 100 diamonds larger than nine carats, including diamonds up to 100 carats in size.

Over the entire 48.6Mt of kimberlite delineated by drilling to date, the expectation would be for some 50 diamonds in excess of 100 carats and 175 diamonds in excess of 50 carats (i.e. two to three a year and one a month respectively if mined at 3Mt/yr), including diamonds of  more than 300 carats in size, being recovered.

Dr Ferreira said: “The size component in this exercise is more reliable than the value component, and is very likely to change when more diamonds are recovered and added to the modelling procedure.”

Dr Stephen Grimmer, Paragon’s Managing Director, said:  “We are delighted that this independent report confirms the exciting economic potential of our flagship Lemphane project in Lesotho as we move towards Stage 1 production. 

“The report highlights that our in-house calculations of preliminary diamond values comfortably exceeding US$750/carat and predicts the recovery of diamonds up to 100 carats in size even in the early stages of production. 

“In stage 2, with the anticipated frequent recovery of large stones we would expect that the value would increase further, certainly in the realms of $1,500/carat envisaged in the published scoping study. 

“Lemphane has always shown potential to produce large, exceptional diamonds, and we feel the comparison with other high-value Lesotho kimberlites, made in this study, is fair and offers further upside, given recent remarkable diamond values achieved at neighbouring mines.”