Lucapa Diamond Company has released a key update on the restart of its Merlin diamond mine in the Northern Territory.
Lucapa first acquired Merlin in 2021 for $8.5 million, marking the project as the first Australian prospect to join the company’s portfolio of two existing diamond projects in Africa.
Since it took the reins, Lucapa has completed a scoping study which estimated a 14 year mine life and a 4.4 million-carat resource.
This was followed up by a feasibility study completed in 2023 which determined market conditions to be unfavourable and temporarily put Lucapa’s restart plans on hold – until now.
Yesterday, the company declared Merlin will officially restart in 2025 under a new two-step plan.
The first phase of the plan will take 18 months to complete and will use excavator dredging to mine to a depth of 15m from the base of five existing open pits.
The second phase is expected to take just over two years and will see Lucapa use vertical pit mining to extract ore from the project’s Gawain pit.
Lucapa is in the process of discussing funding options with a number of parties, which could involve offtake agreements, project level debt, project equity and government facilities.
In the meantime, the company is planning to continue increasing Merlin’s mineral resource through exploration at the site.
It is hoped there may be room to expand given the mine’s proximity to the McArthur River mine, which is owned by Glencore and touted to be one of the world’s largest deposits of zinc and lead.
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