Lucapa in Talks to Buy Merlin Diamond Mine

RAPAPORT… Lucapa Diamond Company is in advanced negotiations to acquire the Merlin mine in Australia after the site’s owner entered liquidation earlier this year.

“The Lucapa board considers that Merlin would be complementary to the company’s existing niche operating mines and exploration projects in Angola, Australia, Botswana and Lesotho, and is a development opportunity that would significantly benefit from the proven capability of Lucapa’s experienced development and operational teams,” the company said Thursday.

The Merlin mine, located in Australia’s Northern Territory, is a multi-pit operation, with the potential to move underground, Lucapa noted. The company also believes there is “considerable exploration potential” in a significant number of possible exploration areas at the mine that the previous owner did not exploit.

Merlin Diamonds, the current owner, was suspended from the Australian Stock Exchange (ASX) in 2018. In April 2020, an Australian federal court declared the company insolvent and appointed liquidators to sell off its assets.

The mine, which Rio Tinto also owned in the past, was the source of Australia’s largest rough diamond, weighing 104.73 carats. It produced diamonds from 1998 to 2003, reopening in 2016, though it is not currently operational.

Lucapa has moved into the final stage of negotiations following a period of due diligence and a competitive bid process, it said. However, the deal will not be definite until the legal documentation has been signed, the company noted.

Image: The Merlin mine. (Merlin Diamonds)