VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 21, 2009) - Lucara Diamond Corp. (TSX VENTURE:LUC) is pleased to announce that it has been granted a diamond mining lease for the Mothae project in Lesotho by the Lesotho Department of Natural Resources. The diamond mining lease, which has an initial term of 10 years and is renewable for an additional 10 years, was granted concurrent with finalization of a mining agreement between Lucara and the Government of Lesotho, which sets out commercial terms of Government participation in the Mothae project.
In terms of the Mothae mining agreement, Lucara will hold a 75% interest in the project and the Government of Lesotho will hold a 25% interest. One half of the project interest held by the Government (i.e. 12.5% of the project interest) will be a free carried interest and one half will be funded by the Government through its share of project dividends. During an initial pre-production test mining stage, a royalty of 4% of the sales value of diamonds produced from Mothae will be payable to the Government. At full production the royalty will increase to 8% of diamond sales value.
Lucara's President and COO, Mr. William Lamb commented, 'This is a major step forward for the Mothae project. Having secured the mining lease, we can now move forward with plans for pre-production test mining which are designed to increase our confidence in the economic potential of the Mothae kimberlite through the validation of diamond grade and value information that was generated in the recently completed bulk sampling program.'
The Mothae kimberlite pipe is located in northeast Lesotho. Mothae is a large (8.8 hectare surface area) low grade kimberlite which contains a significant population of large, high value Type IIa diamonds. Lucara completed a 100,000 tonne bulk sample in April 2009 which yielded an average stone size of 0.44 carats per stone and a sample grade of 4.7 carats per 100 tonnes. A diamond valuation exercise completed in June 2009 resulted in a modeled diamond value for Mothae of US$549 per carat.
The bulk sample was processed through a dense media separation (DMS) plant designed to recover diamonds in the size fraction range from 2 mm to 18 mm. Heavy mineral concentrate produced by the DMS plant was processed over a continuous grease belt for primary diamond recovery, with the exception of the very coarse fraction (+16 mm) which was hand sorted in a secure glove box. All grease belt tailings material was audited through an EVE X-ray diamond recovery unit.
Bulk sample information, together with preliminary delineation drilling and geologic modeling work completed to date by Lucara has resulted in an estimated tonnage potential of between 25 and 35 million tonnes and an estimated in situ grade potential of between 3 and 4 carats per hundred tonnes.
Note that this estimate is preliminary and does not conform to the definition of a mineral resource established by NI43-101. It is uncertain if further exploration and development work will result in definition of a mineral resource on the property. The results derived from these calculations may not accurately reflect the total number of carats that the Mothae kimberlite contains because: (i) the estimated tonnage does not constitute a mineral resource; (ii) further exploration will not necessarily provide the basis for determining a mineral resource; and (iii) the diamond content of the samples collected to date may not be representative of the overall diamond content of these bodies given a number of factors including the location of the drill holes and the location and size of the samples.
Lucara is planning to mine up to 720,000 tonnes of kimberlite from the upper weathered zone of the Mothae kimberlite over a 24 month period, as a pre-production test mining effort to validate current diamond grade and value estimates. Prior to the start of kimberlite processing, the process facility will be upgraded to include a recovery system for larger (greater than approximately 30 carat) diamonds, enhanced water treatment and management systems along with a new recovery plant and sorthouse. It is envisaged that the process facility upgrade will be complete in February 2010. Lucara anticipates that the data generated during pre production test mining, together with additional delineation drilling will provide a more accurate estimate of the tonnage and diamond content of the Mothae kimberlite. A conceptual mining study to develop the Mothae kimberlite to full production at a rate of 2.5 million tonne per annum has been completed and will be updated to a feasibility level if positive results are obtained during the pre production test mining phase.
The technical contents of this release has been reviewed and verified by Dr. Tom Nowicki of Mineral Services Canada, a Qualified Person pursuant to NI43-101.
On Behalf of the Board,
William Lamb, President and COO
Forward-looking statements: This press release contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management's capacity to execute and implement its future plans. Actual results may differ materially from those projected by management.
