Lucapa Diamond Company has announced plans to invest AUD 25 million ($16 million) in the production phase of its Merlin diamond mine in Australia, with an estimated output of 314,000 carats over the next five years.
A Two-Phase Restart Plan
The project will be executed in two distinct phases:
- Phase One:
- Focuses on extracting ore from just beneath the surface of five open pits.
- Scheduled to take 18 months at a cost of AUD 15 million ($9.7 million).
- Expected output: 67,000 carats, valued at $415 per carat, generating total revenue of AUD 42 million ($27.3 million).
- Phase Two:
- Utilizes vertical pit mining at the Gawain pit.
- Scheduled to span 27 months at a cost of AUD 10 million ($6.5 million).
- Estimated output: 247,000 carats, averaging $545 per carat, with projected revenue of AUD 204 million ($132.4 million).
Funding Partnerships in the Pipeline
Lucapa is actively exploring funding options to support this ambitious project, including:
- Offtake agreements.
- Debt financing.
- Selling a royalty on production.
- Establishing a joint-venture partnership.
New Exploration Initiatives
The company has also launched its first extensive airborne survey of the site in 25 years. This survey aims to uncover additional kimberlite pipes and potential base metal deposits. Lucapa believes the site’s geological proximity to Glencore’s McArthur River zinc and lead mine could yield valuable discoveries.
“We believe our large landholding is highly prospective for premium-quality diamond deposits and may also host other minerals,” said managing director Alex Kidman.
Lucapa plans to release the survey results in the first quarter of 2025, providing further insights into the site’s untapped potential.