Lucapa Diamond Company Limited  recently secured a debt financing facility worth US$ 15 million to take ahead its work at the Mothae kimberlite diamond project in Lesotho, in southern Africa.

The Company said the funding will be used to develop Phase 1 of the project. It expects to commence production at the kimberlite in 2018.

The three-year debt  financing facility has been secured from Singapore-based company  Equigold Pte Ltd. It attracts an annual interest rate of 13%; and other fees customary to a facility of this nature. The facility is repayable over eight quarterly instalments starting from December 2018.  By this date, “Lucapa  expects Mothae to be in steady state production under its Phase 1 development plan”, the Company stated.

As per the terms under which the facility has been advanced, there is a provision for Equigold  “to convert the last two scheduled quarterly payments (totalling US$ 3.75 million) into ordinary shares in Lucapa at the lowest one-day VWAP in the 15 days preceding the conversion request”, should they choose to do so.

Lucapa Managing Director Stephen Wetherall commented: “The US$15 million financing facility enables Lucapa to meet one of its key strategic objectives of growing diamond production in the large and premium-value sector – a segment of the global market where sales and pricing has remained robust.”

He added: “This facility is a significant result for Lucapa and its shareholders. It ensures that the Company, together with the Government of Lesotho, will bring Mothae on stream in 2018, adding a second cash producing asset and high-value producing mine to the group that will complement the top-quality diamond production from Lulo.”

Lucapa  noted that the advanced nature of the Mothae kimberlite project, on which US$ 36 million has already been expended, and from which more than 23,000 carats of diamonds have been recovered during an extensive trial mining phase, has enabled it “to fast-track its development under a staged, low-risk plan”.

“Lucapa’s recent work streams at Mothae included optimising Phase 1 to further enhance the economics of the project by increasing diamond production and bringing forward cash flows in what was an already robust project,” the Company stated.