Lulo delivers payday for Lucapa

PERTH (miningweekly.com) – Diamond miner Lucapa Diamond Company will receive A$7.3-million ($5.6-million) in funds from its Lulo diamond mine, in Angola, under the terms of an alluvial mining investment with project partners Empresa Nacional de Diamantes and Rosas & Petalas.

The board of the Lulo operation declared an $8-million combined distribution and capital repayment, with Lucapa, as operator and funder, entitled to receive the first 50% of the $8-million to start the repayment of its eight-year investment in exploration and development.

In addition to the capital repayment, the company is entitled to a gross $1.6-million from its pro rata 40% equity interest in the remaining $4-million being distributed to Lulo partners.

Lucapa MD Stephen Wetherall on Wednesday said he was delighted the Lulo partners had approved the first distribution to all the partners and a capital repayment to Lucapa as funder on the back of the alluvial mining operations.

“This meets one of our primary objectives in developing the Lulo alluvial mining operations, which was to generate free cash flow sufficient to generate returns for the partners and repay Lucapa’s significant capital investment in the project.

“This, in turn, will also provide Lucapa with a source of funding for our exciting Lulo kimberlite exploration programme.”

Wetherall noted that the distribution and capital repayment would also provide a potential source of funding for the high-quality, advanced Mothae kimberlite project, in Lesotho, which the company was planning to have in production and generating its own cash flows within 12 months of completion of the acquisition.

“Already, 2017 has started very positively, with just two diamond sales already generating an additional $11-million in gross revenues. Such continued strong performance and the recovery of more large premium-value diamonds will enhance the prospect of further distributions and capital repayments.”