Lucapa Diamond has suspended a larger feasibility study for the Merlin diamond project in Australia to concentrate on a smaller-scale development at a reduced cost.
This decision was prompted by the prevailing conditions in the capital market and the anticipated decline in diamond prices in 2023.
“Lucapa is in the fortunate position to be debt-free and have two profitable producing mines. For the next 12 months we will focus on further strengthening our balance sheet,” said company managing director Nick Selby.
“Rather than raise capital to fund the original Merlin development, we will focus on a lower cost pathway to development using existing resources.”
The miner said that the alternative study will consider, among other things, putting Merlin into production using extant resources such as the trial mining plant and front-end scrubber.
Lucapa said that progress on the smaller-scale development option is substantial, as it makes use of key workstreams and extant modelling from the initial feasibility study.
It said that the completion of the operating and capital expenditure estimates for the smaller-scale, lower-cost development is anticipated in 2024.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
