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Lucara Diamond Corp. (TSX:LUC) announced that after extensive review, it is divesting itself of its Mothae asset as it does not fit its investment criteria.
Lucara Diamond Corp. (TSX:LUC) announced that after extensive review, it is divesting itself of its Mothae asset as it does not fit its investment criteria. The company intends to report a non-cash impairment of the book value for Mothae in its year-end accounts; it will total approximately $21 million.
According to the press release:
Discussions have been held with the Government of Lesotho and they are supportive of the Company’s approach and have committed to provide support for any potential new owner of the project. The Company intends to report a non-cash impairment of the book value for the Mothae asset in its year-end accounts. Current book value and estimated rehabilitation provision costs total approximately $21 million.
William Lamb, president and CEO of Lucara, commented:
Lucara has been very fortunate to have the opportunity to evaluate the Mothae asset and develop relations with the Government and people of Lesotho. Based on our development strategy and the extensive work conducted on understanding the economics of the Mothae asset, we do not believe that sufficient shareholder value can be gained through the expenditure of current cash reserves on further assessment and development of this project. The Company will continue to focus on its Botswana production and exploration assets while assessing other value accretive opportunities. The Company believes that this operational and investment strategy, along with our current dividend policy, will continue to deliver maximum return to our shareholders.
Click here to read the Lucara Diamond Corp. (TSX:LUC) press release