Name of the Project
Merlin diamond project.

Location
Northern Territory of Australia.

Project Owner/s
Lucapa Diamond Company.

Project Description
A scoping study has shown robust economics for a long-life mine development using conventional openpit and vertical pit mining techniques.

The project will have a processing capacity of about 1.2-million tonnes a year, treating 14-million tonnes over the envisaged 14-year life-of-mine (LoM), with average diamond production estimated at 153 000 ct/y.

The project has a production target of 2.1-million carats over the estimated LoM.

Production over the LoM will be predominantly sourced from indicated and inferred resources, with an estimated 71% from indicated resources and 29% from inferred resources.

The project has total mineral resources of 27.8-million tonnes for 16 carats per hundred tonnes.

Initially, each of the project’s eight kimberlite pipes will be mined using conventional openpit mining.

When the openpit has been completed to the planned depth, vertical pit mining will be imple­mented to deepen the mine below the base of the openpit.

There is potential for viable underground mining beneath the vertical pit mine on certain pipes; however, this has not been included in the cur­rent scoping study.

Lucapa is undertaking a separate scoping study to evaluate a potential underground development.

Potential Job Creation
The mine will require a workforce of about 200 people.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 7% discount rate, of A$343-million and internal rate of return of 59%, with payback expected by the second year of production.

Capital Expenditure
The project will require an initial capital invest­ment of A$96-million, including waste prestrip of about A$18-million.

Planned Start/End Date
The project is expected to have a two-year devel­opment timeline, owing to the advanced stage of the project and existing infrastructure. Production is expected to start in mid-2025.

Latest Developments
Lucapa has paused work on a feasibility study on its Merlin diamond project to assess the potential development of a smaller-scale, lower-cost alternative path to development.

The company has said that amid the current capital market environment and softening of diamond prices this year, it is prudent to pause the study and consider lower production and capital cost options.

The alternate study, which is already well advanced, will examine, among other aspects, using existing resources, such as the trial mining plant and front-end scrubber, to get Merlin into production.

Lucapa expects to finalise the capital and operating estimates for the smaller-scale development during 2024.

Key Contracts, Suppliers and Consultants
AMC Consultants (mining study).

Contact Details for Project Information
Lucapa Diamond Company, tel +61 8 9381 5995.