Paragon Diamonds has announced that it has signed a binding Memorandum of Understanding with Dubai-based International Triangle General Trading LLC for a US$ 12 mn equity and debt finance package that will be utilised for the Stage 1 production at Paragon’s 80%-owned Lemphane Kimberlite Pipe Project in Lesotho.

The Lemphane project is located among a cluster of kimberlites known for producing large, high value diamonds. According to projections, Stage 1 production will involve the extraction of approximately 1 million tonnes of kimberlite over two years and may yield 100 diamonds larger than 9 carats, including some stones over 100 carats in size.  Stage 1 production is now expected to commence in Q2 2015.

ITGT is a privately owned international investment group, with a focus on construction, automobiles, real estate and banking.  ITGT was established in 1991 and is based in Dubai, the wider Middle East and China. The funding has been structured as a mixture of new equity and a secured loan note resulting in limited dilution to existing shareholders.

Paragon’s Chairman, Philip Falzon Sant Manduca said, “This US$12m finance package demonstrates our ability to meet the goals we set ourselves. Paragon is now well placed to take advantage of the expected growth in market share and concomitant diamond distribution activity in Dubai and elsewhere.  I have no doubt that our new partners will greatly assist us in achieving our ambition to vertically integrate our business and distribution reach from production in Lesotho all the way downstream to both consumers and investors in diamonds in Dubai and globally.”