---adds broker comment and share move---
Paragon Diamonds (LON:PRG) updated on the ownership structure of the Lemphane Kimberlite project in Lesotho, which will see it take a 80% stake, while the government holds 20%.
Its local partner Matekane Mining has sold to the firm the 15% it did not own in return for a 12% stake in a share based transaction.
Meanwhile, under the terms of a recent mining lease agreement, the Lesotho government is entitled to a 20% interest in subsidiary Meso Diamonds, which holds the the Lemphane project.
Following the grant of this interest, which is expected shortly, Paragon's interest in Meso Diamonds and thus the project will reduce to 80%, it said.
Paragon has also agreed with the government to sell up to 15% from its 80% interest in Meso Diamonds to accredited Basotho investors at fair commercial values if any such potential investors express an interest.
In February this year, the firm announced the award of the mining lease for the Lemphane prject, heralding the start of trial mining at the kimberlite pipe.
In today's statement Stephen Grimmer, Paragon's managing director, said: "We welcome the Matekane family, who have partnered with us for the last three years, as shareholders of Paragon Diamonds.
"We now move to the critical Stage 1 mining development phase. It should be noted that Paragon Diamonds will now hold 80% of the equity in the project, together with the Government of Lesotho holding 20%, terms not matched by any other comparable mining operation in the country at this time."
House broker Sanlam noted Paragon's 80% interest in Lemphane compared favourably with Gem Diamonds’ (LON:GEMD) 70% interest in Letseng and Lucara’s 75% interest in Mothae.
"Paragon will own more of its project than the other foreign controlled diamond projects in Lesotho. Now that the ownership structure has been cleaned up and the mining licence is in place, we look forward to Stage 1 mining being developed," said analyst Charlie Long.
Paragon shares dipped 2.10% to stand at 3.50p on Monday.