Paragon Diamonds Limited announced late last week that it had received “the necessary formal approval from the Government of Lesotho” to finalise the acquisition of a 75% stake in the Mothae Kimberlite Resource from Lucara Diamond Corporation. Along with this, Paragon also gets operating rights to the resource which stands close to its own Lemphane Kimberlite Pipe Project, and about five kilometres from the Letseng diamond mine in Lesotho.

The companies had earlier signed an MoU in May this year; and a legally binding share purchase agreement in July, subject to Government approval.  With that having been obtained, Paragon will now proceed with the completion of the acquisition.

“The process to obtain formal approval to acquire Mothae took longer than all parties anticipated, having received verbal approval from the Minister at my meeting with him on the 22 June 2015,” Paragon’s Executive Chairman, Philip Falzon Sant Manduca said. “In any event, with the approval now to hand, we can now progress the acquisition and development of Mothae.”

For Paragon, “Mothae represents  a low cost opportunity to fast track Paragon’s strategy to build a leading vertically integrated diamond house and to generate significant value for shareholders through the recovery of large high value diamonds”.

Once all formalities are completed, the Company plans to begin production at both Mothae and Lemphane simultaneously, thus gaining economies of scale.

“In the first full year of production, Paragon is targeting combined revenues of approximately US$ 36 million from both Mothae and Lemphane,” the Company said.