Lucapa Diamond Company Limited (ASX: LOM ) ("Lucapa" or "the Company") announces that the Company has received firm commitments from institutional and senior investors to purchase 166,666,668 fully paid new common shares of the Company at an issue price of 0.075 AUD per share will subscribe. As a result, Lucapa will raise A$12.5 million before costs ("the Placement").
The most important points
- Lucapa raises $12.5 million through foundational investment from Tribeca Investment Partners.
- Following a significant and rapid increase in diamond prices in 2021 and 2022, proceeds will be used to accelerate exciting exploration programs:
Lulo, Angola - Exploring the primary source of large and high-grade alluvial diamonds from the vast kimberlite province on the Lulo Property with a self-contained kimberlite bulk sampling facility and equipment fully operational in Q2 2022 to prepare bulk samples.
- Brooking, Australia - Upcoming drill program and additional geophysical surveys targeting the primary lamproite source of diamonds (three new high interest targets) being mined on the Brooking properties.
- Merlin, Australia - Supporting feasibility study results to be released in Q3 2022 and a kimberlite exploration program targeting new discoveries on two properties.
- Lucapa is exploring strategic collaborations with Tribeca and Margot McKinney OAM, one of Australia's premier jewelers, as Lucapa advances its strategy to achieve significant retail margins.
The placement was backed by Tribeca Investment Partners ("Tribeca"), a Sydney and Singapore based investment fund, and included Lucapa's existing major shareholders. The company also welcomed new institutional investors to its register.
Tribeca has increased its stake in the diamond industry's rarest and most unique assets through the Kimberley Syndicate, a venture with one of Australia's top jewelers, Margot McKinney OAM. In recent years, the syndicate has invested in colored Argyle diamonds (below), among other things.
For any figure, table or attachment in this release, please consult the original English press release.
Tribeca's Head of Global Natural Resources, Ben Cleary, commented, " Lucapa has an incredibly strong and distinguished track record and we believe that together, Lucapa, Tribeca and the Kimberley Syndicate will unlock the full value of the Merlin mine through to retail." . We believe Merlin has the potential to become Australia's premier diamond producer."
Managing Director Stephen Wetherall commented:"We are delighted that our vision and track record of becoming the leading mid-tier global diamond company has led Tribeca to Lucapa. Our recent collaboration has highlighted multiple opportunities, including working with the Kimberley Syndicate to deliver a unique provenance offering while Lucapa continues its strategy to achieve significant retail margins, we look forward to pursuing this opportunity further in a Letter of Intent.
"This placement of A$12.5 million combined with the repayment of SML's A$14 million loan allows us to prepay interest-bearing debt, thereby improving profitability and strengthening the balance sheet. Lucapa is positioned in a solid financial position enabling us to accelerate kimberlite exploration at Lulo with the dedicated bulk sampling facility, complete the drilling program at the Brooking project and accelerate revenue and margin enhancement initiatives to achieve short-term increases in value."
"Importantly, with the placement, an investor has been added who has similar ambitions in relation to the Merlin diamonds and has significant financing options."
The issue price represents a discount of approximately 4% to the Volume Weighted Average Price ("VWAP") of Lucapa shares during the previous 5-day trading period issue ASX Listing Rule 7.1. The shares, to be issued to a company affiliated with non-executive director and major shareholder Ross Stanley, who subscribed for 13,333,333 shares in the offering, are subject to shareholder approval at a yet to be convened general meeting.
Ashanti Capital Pty Ltd is acting as lead manager of the Placement ("Lead Manager") and Foster Stockbroking Pty Ltd is acting as co-manager of the Placement.
Use of proceeds
The proceeds from the placement are to be used as follows:
million AUD
Advancement of kimberlite exploration at Lulo, Angola 7.5
Further development of the Merlin and Brooking projects, Australia 3.0
General working capital and capital raising costs 2.0 in total12.5
Lulo JV
The most advanced and one of the most exciting primary resource exploration programs in the diamond industry is the Lulo Joint Venture in Angola ("Lulo JV"). Lucapa, along with its partners Endiama and Rosa & Petalas, is exploring the primary source of the large and high grade alluvial diamonds being mined in this vast kimberlite province on the Lulo Property.
Map 1 in the original English press release shows: location of the priority kimberlites selected for bulk sampling, as well as other planned kimberlite discovery drilling,
the Canguige catchment area and the new standalone kimberlite bulk sampling facility that the
Lulo JV has out of the more than 100 discovered Kimberlites Identified 18 kimberlites for priority bulk sampling and commenced processing of these bulk samples at the Alluvial Processing Plant. Sampling to date has returned positive results with very significant finds of rare Type IIa diamonds (see ASX news release dated November 8, 2021).
In order to ensure that (i) the alluvial plant capacity is not dependent on, (ii) continuous and unhindered kimberlite processing and (iii) effective diamond recovery from the hard oversized material (via crushing circuits), Lucapa ordered in 2021 a stand-alone kimberlite Bulk Sample Facility ("KBSP") for the Lulo JV (and a separate crushing module). This KBSP is currently being set up on site and is expected to be fully operational in the second quarter of 2022 after the end of the rainy season. In addition, Lucapa has ordered special kimberlite earthmoving equipment which has also arrived on site.
This exploration program is at an exciting and critical stage and a significant portion of the placement funds will be allocated to the Lulo JV to ensure rapid processing of the remaining priority bulk samples and discovery of additional kimberlite targets and turnaround time for results.
Merlin
Lucapa executed the strategic and transformative acquisition of Merlin, an historic Australian mine with a JORC (2012) compliant mineral resource of 4.4 million carats with significant exploration upside through its wholly owned subsidiary Australian Natural Diamonds Pty Ltd (see ASX press release dated 13 March 2012). December 2021).
Merlin greatly complements Lucapa's existing asset portfolio and offers Lucapa the opportunity to develop its third producing mine and build what Lucapa says will be the largest commercial diamond mine in Australia, making Lucapa a mid-tier diamond producer.
Following a significant and rapid increase in diamond prices in late 2021 and early 2022, the Company released an updated scoping study for Merlin (see ASX News Release dated March 3, 2022) which highlights the significant economic potential for a long life mine at Merlin with a production target of 2.1 million carats underlined again.
Map 2 shows: Merlin Diamond Project in Lucapa Northern Territory
is currently conducting a feasibility study with results expected to be released in Q3 2022. A portion of the proceeds from the placement will be used to complete the Company's feasibility study and kimberlite exploration program to make new discoveries on the two properties.
Brooking
The Company has resumed activity on the Brooking project (Lucapa 80%) in Western Australia's West Kimberley lamproite province in 2021 and has identified three new high interest targets for follow-up drilling and test pit excavation (see ASX news release dated November 19, 2021) .
Map 3 shows: The linear high interest target at Cameron's Bore (left) and the two high interest targets at Road West (right)
Lucapa will use a portion of the funds raised from the placement to begin the drilling program and for additional geophysical surveys to identify the primary source of lamproites for the diamonds mined on the Brooking properties.
About Tribeca and the Kimberley Syndicate
Tribeca is a Sydney and Singapore based fund manager with over 25 years of heritage. Tribeca manages client funds for some of the world's largest fiduciaries and invests their funds through a range of strategies including equities, credit and commodities. Tribeca is a trusted partner in the global resource sector and has provided over $10 billion in equity and credit investments over the past 10 years. As a joint venture partner in the Kimberley Syndicate, the Company has increased its interest in the diamond industry's rarest and most unique assets.
Margot McKinney comes from a long family tradition in luxury retail and is the fourth generation to run a unique Australian family business that dates back to 1884. She was recently awarded the Order of Australia for her services to Australian jewelery design and philanthropic efforts. Inspired by the vibrant, exotic textures and colors so abundant in the Australian landscape, Margot's jewelry is the jewel in the crown of respected luxury retailers such as Neiman Marcus in the United States and Bergdorf Goodman in New York City. As a member of the Kimberley Syndicate, Margot curates the finest collection of Australian diamonds ever assembled.
ABOUT LUCAPA
Lucapa Diamond Company Limited is an ASX listed diamond mining and exploration company with assets in Africa and Australia. The Company holds interests in two producing diamond mines in Angola (Lulo) and Lesotho (Mothae). The large, high quality diamonds mined from these two niche African mines fetch some of the highest prices per carat for rough diamonds in the world.
The Lulo mine has been in commercial production since 2015, while the Mothae mine started commercial production in 2019.
Lucapa recently acquired the Merlin Diamond Project in Australia's Northern Territory. It consists of a 24 km 2mining lease and a 283 km 2 exploration license which includes the mining lease. The mining lease contains 11 previously discovered kimberlite pipes in three kimberlite clusters with an existing JORC 2012 compliant resource of 4.4 million carats. There are two known diamond bearing kimberlites on the exploration license.
Lucapa and project partners are also exploring for potential primary kimberlites or lamproites at the prolific Lulo Concession in Angola, the Brooking Project in Australia and the Orapa Area F Project in Botswana.
Lucapa's board, management and key stakeholders have extensive experience in the global diamond industry and networks throughout the value chain from exploration to retail.
Approved by the Lucapa Board.
LOM Price at posting:
7.6¢ Sentiment: Buy Disclosure: Held
(20min delay)