June 25, 2024 – In a move to streamline its portfolio, Lucapa Diamond Company Limited (ASX:LOM) has signed a conditional Sales and Purchase Agreement to sell its 70% stake in Mothae Diamonds (Pty) Ltd to Lephema Executive Transport (Pty) Ltd, a local Lesotho company. This divestment allows Lucapa to concentrate on its key assets in Angola and Australia.
The decision comes after a comprehensive review by Lucapa’s restructured board of directors, emphasizing the company’s shift away from non-core assets. Nick Selby, Lucapa’s Managing Director and CEO, expressed confidence in the new arrangement. “This agreement is the result of extensive negotiations involving several interested parties. Executive has a proven track record with the Mothae Diamond Mine, having provided long-term contract mining services. Their continued operation of the mine aligns with our goal to ensure its longevity.”
Under the terms of the agreement, Lucapa will receive a nominal purchase price of A$10,000 from Executive, along with approximately A$1 million from Mothae for outstanding technical services payments. Executive will also assume all liabilities and guarantee obligations currently held by Lucapa. Despite the sale, Lucapa will continue to provide technical services to Mothae under a revised agreement for at least three months, ensuring a smooth transition.
The transaction does not require shareholder approval, as confirmed by the ASX under Listing Rules 11.1 and 11.2. However, completion of the sale is contingent on several key conditions:
– Consent from the Lesotho Minister of Natural Resources
– Execution of a Delegation Agreement involving Lucapa, the Lesotho Government, and Executive
– Confirmation from SAFDICO regarding the validity of the Offtake Agreement post-transaction
– Amendment of the Technical Services Agreement to include a three-month no-fault cancellation provision
If these conditions are met, the transaction is expected to be finalized by September 30, 2024.
Selby highlighted the strategic importance of this move, stating, “This divestment is a key step towards focusing on our assets in Australia and Angola, ensuring that Lucapa remains on track with its new strategic direction.”
The sale of Mothae Diamonds (Pty) Ltd marks a significant milestone for Lucapa as it pivots towards optimizing its core operations and enhancing shareholder value through focused asset development.
ABOUT LUCAPA
Lucapa is an ASX listed diamond miner and explorer with assets in Africa and Australia. It has interests in two producing diamond mines in Angola (Lulo, in which LOM holds 40%) and Lesotho (Mothae, in which LOM holds 70%). The large, high-value diamonds produced from these two niche African diamond mines attract some of the highest prices/ carat globally.
The Lulo mine has been in commercial production since 2015, while the Mothae mine commenced commercial production in 2019.
In 2021, through its wholly owned subsidiary, Australian Natural Diamonds Pty Ltd, Lucapa completed the strategic and transformative acquisition of the Merlin Diamond Project, an historic Australian mine in the Northern Territory of Australia.
Lucapa and its project partners are also exploring for potential primary source kimberlites or lamproites at the prolific Lulo concession in Angola and the Brooking project in Australia.
The Board, management and key stakeholders in Lucapa have deep global diamond industry experience and networks all through the value chain from exploration to retail.
