Paragon Receives Government Approval for Mothae Acquisition

(IDEX Online News) – Paragon Diamonds has received approval from the government of Lesotho to complete the acquisition of a 75-percent interest in, and operatorship of, the defined Mothae Kimberlite Resource from Lucara Diamond Corporation.

Mothae is located five kilometres from the Letseng diamond mine, which is situated within a cluster of kimberlites, including Paragon’s Lemphane Kimberlite Pipe Project

The company said Mothae represents a low cost opportunity to fast track its strategy to build a leading vertically integrated diamond house and to generate significant value for shareholders through the recovery of large high value diamonds.

Once the acquisition is completed, Paragon will develop and begin production at both Mothae and Lemphane simultaneously. In the first full year of production, Paragon is targeting combined revenues of approximately $36 million from both mines.

“There is clear and present evidence to hand that our strategy of focusing on the investment grade diamond sector as an alternative to paper money is correct. I am so bullish about our prospects as a company and I look forward to updating shareholders in due course,” said Paragon executive chairman Philip Falzon Sant Manduca.

“I believe that analysts are focusing more and more on our vertically integrated strategy for the diamond industry, as the wholesale market gets squeezed into having to occupy a smaller role, allowing producers such as Paragon to capture the additional profit margin by transacting directly with investors and consumers… Investment grade diamonds are a better, more mobile currency and store of wealth than financial paper, real estate, art, cars or gold.  Paragon is in the right place at the right time and remains deeply undervalued to its asset base,” he added.