Lucara Diamond Corp announced recently that “after extensive financial and economic review, the Company intends to divest of its Mothae asset”.

The Company said that it had considered “multiple development options” for Mothae, and while the resource is diamondiferous, “Mothae does not meet the Company's disciplined investment criteria for its targeted return on capital and its forecast generation of long term free cash flow potential”. Hence, the Company says, it has decided “to enter into a process of divestiture of the asset”.

Lucara has held discussions with the Government of Lesotho which, the Company says, supports its approach. The Government of Lesotho has also assured  Lucara of its commitment to provide support for any potential new owner of the project. “The Company intends to report a non-cash impairment of the book value for the Mothae asset in its year-end accounts. Current book value and estimated rehabilitation provision costs total approximately $21 million,” a statement from the company explained.

William Lamb, President and Chief Executive Officer commented, "Lucara has been very fortunate to have the opportunity to evaluate the Mothae asset and develop relations with the Government and people of Lesotho. Based on our development strategy and the extensive work conducted on understanding the economics of the Mothae asset, we do not believe that sufficient shareholder value can be gained through the expenditure of current cash reserves on further assessment and development of this project. The Company will continue to focus on its Botswana production and exploration assets while assessing other value accretive opportunities. The Company believes that this operational and investment strategy, along with our current dividend policy, will continue to deliver maximum return to our shareholders."