Lucapa Diamond Company (ASX:LOM) has finalised all terms for the US$15 million financing facility with Equigold Pte Ltd and executed the legal agreements.
The facility will fund the updated Phase 1 development plan for its 70% owned Mothae kimberlite diamond project located in Lesotho, southern Africa.
READ NOW: Lucapa Diamond Company increases Mothae economics
Lucapa is scheduled to draw down US$10 million of the Equigold facility this month as it remains on track to bring Mothae into production early in the second half of 2018.
Furthermore, Lucapa has repaid the A$5.5 million (US$4.3 million) bridging facility to First Class Securities from available cash reserves as it had planned to do this quarter.
Debt facility details as previously stated
The secured US$15 million three-year debt facility has been arranged with private Singaporean company Equigold Pte Ltd.
The facility carries an annual interest rate of 13% and other fees customary to a facility of this nature.
The facility includes a provision for Equigold, at their election, to convert the last two scheduled quarterly payments (totalling US$3.75 million) into ordinary shares in Lucapa at the lowest one-day VWAP in the 15 days preceding the conversion request.
Background
Lucapa is a growing diamond company with a portfolio of high-quality production, development and exploration assets in Angola, Lesotho, Botswana and Australia
Its flagship asset is the Lulo Diamond Project, which is a partnership over a 3,000 square kilometre concession.
It is a joint venture between Lucapa, who holds a 40% operating interest, Endiama (Angolan government) and Rosas & Petalas – a private partner.
Exploration drilling ongoing at Lulo
Lucapa continues to advance a systematic drilling program to test priority kimberlite targets identified near the high-value Lulo alluvial diamond mining operations in Angola.
Drilling is now focused on the cluster of kimberlite targets located along tributaries draining into and around the prolific Mining Block 8 area.
US$61 million of alluvial diamonds have been recovered and sold to date from the area and Lucapa continues to regularly recover large and premium value diamonds.
A further eight targets have been drilled in this area and kimberlite has been intersected in four of those eight targets – E3, E4, E6 and G510.
READ NOW: Lucapa Diamond Company drills out kimberlite at multiple targets
Drilling of the remaining targets in this cluster near Mining Block 8 will continue throughout the current December quarter.