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Lucara Diamond Corp to acquire Motapa Diamonds in all share deal

Published: 18:16 17 Mar 2009 GMT

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Lucara Diamond Corp (TSX-V: LUC) announced that it would acquire fellow diamond junior,  Motapa Diamonds (TSX-V:MTP) in an all share deal.  Consolidation among mining juniors has accelerated in recent months as companies struggle to raise finance to fund their exploration activities, forcing several marriages in an attempt to increase the odds of raising fresh capital from the markets.

Lucara Diamond Corp is offering 0.9055 shares for every Motapa Diamonds share, representing a 104% premium to Motapa Diamond’s trailing 20 day volume weighted average price. Motapa Diamonds shareholders will hold 35% of the enlarged company.

Lucara Diamond Corp said that the two boards of directors “overwhelmingly” approved the deal.

William Lamb, General Manager of Lucara, commented, "This business combination is an excellent opportunity to create added value for both companies and establish a focused, strategic platform for further expansion in Africa. This is an opportune time to consolidate Mothae and create a larger, more robust company while strategically assessing future growth opportunities."

The combined company will have interests in Namibia, Gabon, Botswana and the Democratic Republic of Congo. The merged entity will also have 100% ownership of the Mothae diamond development project in Lesotho – an 8.8 hectare pipe located only 6.5 kilometres from the Lestang diamond mine.

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