Lucara to Sell Mothae Stake to Paragon Diamonds

Lucara Diamond Corp. (TSX:LUC) announced that it’s signed a memorandum of understanding (MOU) to sell its 75-percent stake in the Mothae diamond project to Paragon Diamonds Ltd. (LSE:PRG). Paragon will pay Lucara US$8.5 million in cash for the interest.

Other terms of the MOU include:

• Paragon plans to polish a selection of diamonds recovered from the Mothae asset. Lucara will receive a payment equal to 5% of the profits achieved from the sale of the polished stones. These payments will continue for the processing of not less than 6.75 million tonnes of ore.
• Lucara will also receive a payment equal to 5% of the profits achieved from the sale of rough diamonds not selected for polishing. These payments will also continue for the processing of not less than 6.75 million tonnes of ore.
• Paragon will be acquiring Lucara’s Lesotho based company, which owns its 75% interest in the Mothae project. This will include all assets including plant and equipment, liabilities and the company’s rehabilitation obligations. Paragon has agreed that it will employ all of the current employees working at Mothae.

William Lamb, president and CEO of Lucara, commented:

We are pleased to announce that we have agreed terms with Paragon on the sale of Mothae. The transaction returns cash to Lucara and allows us to participate in future sales of diamonds from Mothae. We are working with the Government of Lesotho and Paragon to finalize the transaction and to transition ownership of the Mothae project to Paragon in an efficient manner.

Click here to read the full Lucara Diamond Corp. (TSX:LUC) press release.