JOHANNESBURG (miningweekly.com) – Lesotho-focused Paragon Diamonds continues to advance its flagship Lemphane project, and is currently undertaking an extensive bulk sampling programme with the objective of establishing an inferred resource by the first half of 2014. 

The Aim-listed company reported on Wednesday that the Lemphane kimberlite, at an early stage in its resource evaluation, had already produced diamonds with individual values over $2 300/ct.

In line with the group’s intent to develop and bring the operation into production as soon as possible, it had submitted a mining licence application to the Lesotho government in February.

If approved, this would allow the processing of 100 000 t in addition to the 30 000 t of surface bulk currently being processed during the trial mining phase.

“It is anticipated that between 2 000 ct and 3 000 ct will be produced during trial mining, with a potential value of between $2-millon and $5-million,” executive chairperson Martin Doyle commented.

The trial mining programme would be informed by the current delineation drilling programme, which was intended to develop a detailed internal geological model that would be correlated and combined with the mapping of surface geology.

In addition, the company confirmed that it had successfully applied for a permit to extract water from the nearby Malibamatso river and had completed full commissioning of the new water supply in February.

Paragon announced separately on Wednesday that it had conditionally raised £1.55-million by way of a subscription by existing and new shareholders, and would channel these funds into the continued development of Lemphane.

“This fundraising will supplement the group's existing loan facility with our 43% shareholder Obtala Resources, which had some £200 000 remaining undrawn on May 28,” said Doyle.

MOTETE DYKE

In addition to developing the Lemphane prospect in 2013 and beyond, Paragon said its would concurrently advance the evaluation and development of its second Lesotho diamond resource, at the Motete Dyke.

A resource statement released in December by the company's 85%-owned subsidiary Botle Diamonds defined a net attributable resource at Motete of 1.33-million tonnes at a grade of 65 carats per hundred tonnes for net contained caratage of 0.86-million carats on a cutoff of 1.18 mm.

The average diamond value was $62/ct with values of $500/ct noted in the larger sieve class.

“The next step in the dyke resource evaluation and development is to collect additional bulk samples of kimberlite to confirm the higher dollar-a-carat values in the larger diamond sizes,” said Doyle. 

Botle Diamonds had also applied for three further prospecting licences with a combined area of 74 km² on adjacent ground, which the company believed to be highly prospective for kimberlite dykes.

Future discoveries on the applications would contribute additional tonnage and life-of-mine to the current established resource.