Lucapa Diamond Corporation in discussions with Angolan government to secure majority stake in Lulo mine

‘Lucapa Diamond Corporation is in advanced discussions with the Angolan government to secure a majority stake in its Lulo mine, it said Thursday.

The company currently owns 39% of the 3,000-square-kilometer project, which is based in the Lunda Norte region. State-owned Endiama owns 51%, and private local company Rosas & Petalas holds a 10% share. Lucapa hopes to reach an agreement with the Angolan Ministry of Mineral Resources and Petroleum in the first quarter of 2020.

Angola has recently relaxed its rules requiring government ownership of a majority stake in diamond projects, Lucapa CEO Stephen Wetherall told Rapaport News Thursday. “This [is] due to the new government wishing to attract significant foreign direct investment into the mining sector,” he said. 

Lulo regularly yields high-quality alluvial stones, with output at the mine increasing 67% to 7,603 carats in the third quarter as the recovered grade jumped 88%, the company reported last month. During the period, sales of rough rose 49% to $6.7 million, and the average price climbed 28% to $1,143 per carat. In 2016, Lucapa recovered a 404.2-carat diamond from Lulo, the largest rough in Angolan history.

Lucapa believes it is getting closer to pinpointing the kimberlite source of its rough diamonds at Lulo, predicting it will hit the “mother lode” within the next two years, it noted in May.

The company’s stock rose 5% in early trading Thursday following the announcement.’

Source – Rapaport