Lucapa Anticipates Positive Cash Flow from Alluvial Diamond Mining

Lucapa Diamond Company Ltd. (ASX:LOM) announced that commercial alluvial mining operations at its Angola-based Lulo diamond project are set to become cash-flow positive at the end of the June 2015 quarter.

The company only started commercial alluvial mining operations in January 2015, but was able to exceed its Q1 mining and processing targets. It locked down a 35-year mining license in November 2014.

As quoted in the press release:

In the three months to the end of March 2015, the mining team exceeded its overburden stripping targets to expose 12,912 bulk cubic metres (bcm) of diamond bearing gravels which was transported and processed through the 150 tonne per hour diamond treatment plant. This exceeded the March 2015 quarter processing target of 12,000 bcm, despite mining operations being restricted to river terraces and other areas close to the diamond treatment plant due to the Angolan wet season.

This produced a total of 1,317 diamonds weighing 1,335 carats for an average stone size of 1.01 carats per stone. A selection of the exceptional Lulo alluvial diamonds recovered during the March 2015 quarter is shown below and on pages 4 and 5.

Consistent with previous bulk sampling recoveries, the diamonds recovered during the quarter included large specials (>10.8 carat) including individual stones weighing 26.7 carats, 23.45 carats, 20.35 carats, 19.85 carats, 15.1 carats, 12.7 carats, 11.95 carats and 11.55 carats. As with previous recoveries, several of these special stones were confirmed as rare Type IIa gems.

The recovered diamond grade of 10.34 carats per 100 cubic metres (cphm3 ) achieved during the March 2015 quarter is consistent with the average bulk sampling results from the areas mined.

Stephen Wetherall, CEO of Lucapa, commented:

We are extremely pleased to have exceeded our throughput targets for the first three months of diamond mining at Lulo during the challenging conditions of the Angolan wet season. It is also encouraging that even without a JORC resource estimate, the average diamond grades we have achieved in the first three months of mining mirror the grades we estimated following the bulk sampling test work in the mining area.

This gives us great confidence going into the June 2015 quarter as the focus of our mining operations will also now include the high grade areas where we recovered our largest and most valuable diamonds during bulk sampling.

Achieving our throughput targets for the current quarter will also enable Lucapa to achieve another significant milestone, which is for our alluvial diamond mining operations to start generating positive operating cash flows by the end of the June 2015 quarter.

Click here to read the full Lucapa Diamond Company Ltd. (ASX:LOM) press release.