The NT’s Lucapa diamond mine revival in doubt as KordaMentha called in
Administrators have been called in to another Territory mining project. Read which one.
Northern Territory
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Administrators hope to sell a Territory diamond mine caught-up in the voluntary administration of an embattled Perth-based resource player.
KordaMentha Restructuring were on Thursday appointed voluntary administrators for Perth-based diamond miners Lucapa Diamond Company Limited.
Associated entities Brooking Diamonds, Heartland Diamonds and Australian Natural Diamonds are also in administration.
The announcement brings into doubt the future of the Merlin diamond mine revival, which Lucapa extensively promoted last year.
A spokesman for the administrators said the sale of Lucapa’s assets including the Merlin mine near Borroloola, about 720km southeast of Darwin, were likely.
One of only three Australian diamond mines, none of which are currently operating, the Merlin kimberlite field was discovered and operated by Ashton Mining between 1985 and 1995, and Rio Tinto mined the site between 1999 and 2203.
More than half-a-million carats of predominantly gemstone-grade diamonds were extracted at Merlin, including the 104 carat type 2a diamond, the largest diamond ever found in Australia.
Lucapa purchased the Merlin mine in 2021 for $8.5 million, with plans to spend $25 million over two stages to deliver a five-year mine life extension.
A 2021 scoping study of the mine conducted soon after Lucapa’s purchase identified potential revenues of $1.6 billion, a 2.1 million carat production target and 14-year-life-of-mine.
Lucapa managing director Stephen Wetherall said in 2021 the company resumed interest in Lucapa when the Covid pandemic forced the company to mothball diamond mine projects in Angola and Lesotho.
“The results of the scoping study confirm the great potential identified by Lucapa using an innovative hybrid open pit and vertical pit mining methodology to establish a mining operation at Merlin,” Mr Wetherall said.
“The scoping study sets out strong economics for a long-life mine with a production target of 2.1 million carats, A$1.6bn in revenues and substantial earnings and cashflows to Lucapa over a 14-year life.
“There is potential to deliver further significant value through the operational opportunities and from mineral resource extensions, underground development and exploration as the kimberlites continue at depth and there are a significant number of anomalies that have the potential to deliver new source discoveries.”
A representative from Lucapa has been contacted for comment.
In addition to Merlin, two other NT resource projects have hit troubled waters in recent years, with Peko’s iron ore revival canned last year and then Barkly-based Northern Iron entering administration last month.
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Originally published as The NT’s Lucapa diamond mine revival in doubt as KordaMentha called in
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