Lucara Diamond Corp has signed a Memorandum of Understanding (‘MOU’) with Paragon Diamonds Limited to sell its 75% interest in its Mothae diamond project based in Lesotho, where trial mining has already been completed. The sale is subject to approval by the Government of Lesotho.

As per the agreement, Paragon will pay Lucara US$ 8.5 million in cash at the time of the acquisition as well as a 5% share in profits from sale of any stones sourced from Mothae that Paragon decides to polish and sell, as well as 5% of profits from sales of all rough diamonds. The share will continue for the processing of not less than 6.75 million tonnes of ore.

While acquiring Lucara’s Lesotho based company, which owns its 75% interest in the Mothae project, and all assets including plant and equipment, liabilities and the company’s rehabilitation obligations, Paragon has also agreed to retain all current employees working at Mothae.

William Lamb, President and Chief Executive Officer, commented, “We are pleased to announce that we have agreed terms with Paragon on the sale of Mothae.  The transaction returns cash to Lucara and allows us to participate in future sales of diamonds from Mothae.  We are working with the Government of Lesotho and Paragon to finalize the transaction and to transition ownership of the Mothae project to Paragon in an efficient manner.”

Lucara has 100% ownership of the Karowe Mine in Botswana which is in production.