‘Merlin would be complementary to the Company’s existing niche operating mines’: Company sets sights on NT mine

AN expanding diamond company with a large portfolio of diamond assets ihas put its hand up to buy a Northern Territory mine which is currently in the hands of liquidators

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AN expanding diamond company with a portfolio of diamond assets in Angola, Lesotho and Australia has put its hand up to buy the Northern Territory’s Merlin Diamond mine, which is currently in the hands of liquidators.

Perth headquartered miner and explorer, Lucapa Diamond Company, said it was participating in the sale process being conducted by the liquidators of Merlin Diamonds Limited to acquire certain assets of MDL, which include the Territory’s Merlin kimberlite diamond mine located about 80km south of Borroloola.

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Lucapa is listed on the Australian Securities Exchange (ASX), with a secondary listing on the Frankfurt Stock Exchange.

Under the ownership of Merlin Diamonds — previous owners include Ashton Mining, Rio Tinto and North Australian Diamonds — the mine’s total production never reached the targets set.

The Merlin diamond mine is currently one of only three diamond mines in Australia.

Lucapa said the Merlin plan was in keeping with the company’s goal of growing as a diamond producer. “The Lucapa board considers that Merlin would be complementary to the Company’s existing niche operating mines and exploration projects in Angola, Australia, Botswana and Lesotho and is a development opportunity that would significantly benefit from the proven capability of Lucapa’s experienced development and operational teams,” the company said in a statement.

“Merlin is a multi-pit mine development opportunity with underground mining potential and is home to Australia’s largest recovered diamond of 104 carats.

“Lucapa is of the view that the tenements also have considerable exploration potential with a significant number of unresolved exploration targets. Following the finalisation of due diligence in a competitive bid process, Lucapa is advancing to final stage negotiations, which includes finalisation of transaction structure and drafting of legal documentation.

“Until such time as the legal documentation is in agreed form and executed, there can be no assurance that the acquisition of Merlin will be completed.

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“The Lucapa Board will update the market of material developments as they occur.’’

The Federal Court of Australia made orders to wind up Melbourne-based Merlin Diamonds Limited (Merlin) on insolvency grounds in April this year following an application from the Australian Securities and Investments Commission.

The court found the company to be insolvent.

Its flagship project was the Merlin diamond mine in the Northern Territory.