Paragon Diamonds (LON:PRG) has been informed by Sierra Leone’s Ministry of Mines that it may need to re-apply for four licences in the country.
Paragon had already put its Konoma mine in Sierra Leone on a care and maintenance basis last year due to the uncertainty over mining legislation in the country and has reduced its operating costs to the minimum necessary to safeguard its physical assets and the few remaining staff in-country.
It says that it has now received letters from the Ministry of Mines that four mining licences held by the company's subsidiary, Sierra Leone Hard Rock may require re-application and/or re-issuance.
Paragon added it has written to the Ministry to seek clarification on this matter as it believed the licences in question were not due for renewal until 2016.
Stellar Diamonds (LON:STEL) said yesterday it was also in dispute with the Sierra Leone mining ministry over the legitimacy of its licences for its two licences in the Kono District in the country.
Stephen Grimmer, Paragon’s managing director, said: "The company will continue to seek clarification on the irregularities surrounding these issues - particularly as the licences under discussion were issued as valid until April 2016, and are not subject to any renewal at this time.”
He added that Paragon is now focused on its assets in Lesotho at the Lemphane and Motete kimberlites, where he said the potential exists to rapidly develop a diamond resource “far exceeding the stated mineral assets in Sierra Leone".
Paragon released latest data from Motete today, showing comprehensive micro-diamond grades of 90 cpht at +0.85mm and 60 cpht +1.18mm, while its own consultant confirmed in-house tonnage estimates of 1.1 Mt to 2,350 m ASL.
The value of the diamonds at the site was provisionally estimated by its diamond valuer at US$ 160 per carat for +0.85mm and US$ 200 per carat for +1.18mm diamonds.
Paragon added that road access is complete and the first bulk sample of 350 tonnes had been mined and transported to the process plant.
A delineation drilling programme of four drill holes starts in early May, which will be the basis of an initial diamond resource at Motete.