The acquisition of Merlin Diamond Mine by Lucapa Diamonds is expected to be the biggest commercial diamond mining operation in Australia with a targeted yield of 153,000 carats per year when it begins full-scale production in 2024.
Overall, Lucapa aims to produce 2.1 million carats throughout Merlin’s expected 14-year ‘lifespan’ based on the company’s feasibility study, with projections centred on a combination of open pit and vertical mine development.
The Merlin site is located in the Northern Territory and was previously operated by Rio Tinto before North Australian Diamonds, also known as Merlin Diamonds, acquired it in 2004. It operated small-scale commercial processing until it closed in May this year.
“The successful development of Merlin will be transformative for Lucapa as the delivery of the company’s third producing mine will expand our production base and revenues considerably elevating Lucapa into a mid-tier diamond producer,” Stephen Wetherall, managing director, Lucapa said.
According to the study, the mine’s estimated value is $343 million before taxes with a forecasted 59 per cent internal rate of return, while it estimated an initial capital of $96 million to develop the “hybrid” mining methodology.
“There are a significant number of anomalies that have the potential to deliver new source discoveries,” Wetherall told Mining Weekly, noting that the study is expected to be completed by the middle of 2022.
He added that kimberlite explorations are expected to start by the second quarter of 2022.
Lucapa is listed on the Australian Securities Exchange, with a secondary listing on the Frankfurt Stock Exchange.