Lucapa prepares for Angola diamond rush
Lucapa Diamond Company Limited (ASX: LOM) (“Lucapa” or “the Company”) provides the following
transcript of the address by Chairman Miles Kennedy to shareholders at the Company’s 2018 Annual
General Meeting held Thursday May 24.2018.
For and on behalf of the Lucapa Board.
“Welcome everyone to the 2018 Annual General Meeting of Lucapa Diamond Company Ltd.
Recently, in the Company’s annual report, I outlined some of the significant achievements made by
Lucapa during the past year.
- Growing throughput at the flagship Lulo diamond mine in Angola, which continues to
deliver the highest US$ per carat production of any alluvial diamond operation in the world
while also funding a systematic kimberlite drilling program
- Securing a 70% interest in the Mothae kimberlite project in Lesotho as well as project
financing for the optimised Phase 1 development plan, which remains on time and schedule
for commercial production this year.
- A spectacular diamond discovery at the 80% owned Brooking project on the doorstep of the
Ellendale mine in Western Australia’s West Kimberley region.
Your Board and management teams continue to make further progress across this suite of projects
as we strive to unlock the true value of our diamond assets.
In Angola, we remain in high-level discussions to assist the Angolan Government to achieve its goal
of doubling diamond production.
The Government and its State-owned diamond enterprises have committed to making changes that are likely required to secure the foreign investment and expertise needed to achieve this goal. Having operated in Angola for a decade, through some very difficult times, Lucapa is in a great position to benefit from these changes. We expect further progress this year.
On the mining front, we continue to recover large and premium-value diamonds from new areas
along the ~50km stretch of the Cacuilo River valley which runs through our Lulo concession. Recent
recoveries from new mining blocks we have opened up, such as Mining Block 4, include a 46 carat
pink, our biggest coloured diamond to date, as well as a number of high-value Type IIa D-colour gem
While our mining to date has focused on the alluvial terraces along the Cacuilo River, we believe
there is major potential for the flood plains to also host diamond-bearing gravels, which would open
up large new mining areas. We plan to begin testing these expansive flood plains during the 2018
The dry season will also enable the Lulo partners to step-up our kimberlite exploration program. We
plan to complete drilling of the remaining kimberlite targets, defined following the airborne TDEM
survey, by the end of this year.
In Lesotho, our development team is well on schedule to commission our new Mothae mine in the
second half of this year. Our new 150 tonne per hour plant is already being constructed on-site, with
the XRT large-diamond recovery circuit due to arrive soon after being shipped to South Africa from
In addition, trial processing of kimberlite material through our recommissioned bulk sampling plant
following recent efficiency and security modifications has met with immediate success, with
recoveries from the first two days including a 25 carat yellow gem. Significantly, this Special was
recovered from the non-resource Neck Zone and augurs well for an upcoming 50,000 tonne bulk
sampling program which aims to increase the +1m carat JORC resource and extend the mine life.
There is also much excitement as our exploration efforts resume at the Brooking project in the West
Kimberley to follow-up on the spectacular Little Spring Creek discovery in January, in which 119
micro and macro diamonds were recovered in samples from a single standard HQ (63mm) drill core.
As we have announced this week, the drill crew is expected back on site at Little Spring Creek very
soon following the completion of our first stage ground geophysical surveys, which have improved
our target definition.
Airborne geophysical surveys are scheduled to be flown over the broader Brooking project area next
month with the aim of defining additional drilling targets at other priority prospects where
diamonds and lamproite indicator minerals were recovered from previous surface sampling
programs. These priority target areas include Katie’s Bore, Cameron’s Bore, North East Creek, Santa
Fe Dam, Homestead Creek and East West Creek.
Lucapa is advancing its mining, development and exploration efforts from a position of significant
financial strength following the completion of a recent A$16.5 million capital raising.
Significantly, this additional capital was contributed by some of Lucapa’s major shareholders at no
discount to the prevailing market price, illustrating the strong support the Company has from its
larger shareholders to deliver on our growth strategies.
The capital raising also delivered Lucapa a new and significant shareholder in Ross Stanley. Ross
Stanley has had a long and successful track record in the mining and drilling industries in Africa and
elsewhere around the globe.
The placement has also helped Lucapa achieve two of its other goals. One was to remove the
“unfunded” overhang from the share price and the second was to tighten up the Company’s share
register, with the top 10 shareholders now accounting for more than 30% of the stock. Other
initiatives we have taken to tighten up the register include the assisted sale of unmarketable
parcels and engaging reputed advisor and broker Euroz Securities to attract additional institutional
backing for the Company.
The plans we have put in place for Lucapa have been deliberate – they have required patience but
the foundations are now well established and Lucapa has never been in a better position. We have
the projects, financial strength and dedicated and hard working management and operational
teams to achieve our goals. The team you see in front of you today has delivered and I have no
doubt they will continue to do so.
We are almost half way through this year already, having already ticked a number of our boxes, but
we look forward to the months and years ahead with much excitement.