Lucapa Diamond has entered into a binding asset sale agreement for the acquisition of a 24km2 mining lease (MLN 1154) and a 283km2 exploration tenement encompassing the Mining Lease (Merlin Tenements) and associated equipment and assets (Merlin Assets) from Merlin Operations, a wholly-owned subsidiary of Merlin Diamonds.
The Merlin Tenements are located in the Northern Territory of Australia, about 720km south-east of Darwin.
“This is a strategic acquisition for Lucapa which represents a value-accretive and logical step in Lucapa’s production strategy,” said company managing director Stephen Wetherall.
“The project is well known for being Australia’s large stone producer and is a strong complementary fit with the company’s two existing niche productions in Africa that are set to produce solid returns for Lucapa in 2021.”
The 300km2 tenement package also comes with significant exploration upside through over 70 unresolved anomalies in areas where all kimberlite discoveries have been diamondiferous.
Lucapa is required to pay the purchase price to Merlin Operations in respect of the Merlin Assets of about A$7.4m in cash and will also replace A$1.1m financial security relating to the Merlin Tenements with the Department of Industry, Tourism and Trade in the Northern Territory.
It said the cash outlay of about A$8.5 million in aggregate represents an attractive A$2/ carat multiple on Merlin Operations’ existing 4.4 million carat resource.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
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