Lucara to Sell Mothae to Paragon Diamonds

(IDEX Online News) – Lucara Diamond Corp. has signed a Memorandum of Understanding (MOU) with Paragon Diamonds Limited to sell its 75-percent interest in the Mothae diamond project for $8.5 million in cash. The sale of the Lesotho project is subject to approval by the government of Lesotho.

Under the terms of the agreement, Paragon will acquire Lucara's Lesotho-based company, which owns its interest in the Mothae project. This will include all assets including plant and equipment, liabilities and the company's rehabilitation obligations. Paragon has agreed that it will employ all of the current employees working at Mothae.

Paragon said it plans to polish a selection of diamonds recovered from Mothae asset. Lucara will receive a payment equal to 5 percent of the profits achieved from the sale of the polished stones. Payment will continue for the processing of not less than 6.75 million tons of ore.

Lucara will also receive a payment equal to 5 percent of the profits achieved from the sale of rough diamonds not selected for polishing. These payments will also continue for the processing of not less than 6.75 million tons of ore.

“We are pleased to announce that we have agreed terms with Paragon on the sale of Mothae,” said Lucara president and CEO William Lamb.

“The transaction returns cash to Lucara and allows us to participate in future sales of diamonds from Mothae. We are working with the Government of Lesotho and Paragon to finalize the transaction and to transition ownership of the Mothae project to Paragon in an efficient manner."