The Lemphane Kimberlite project is one of the five known diamondiferous kimberlite pipes in the region and the only one that has no historic mining activity.
Granted for an initial ten-year period, the mining lease was issued under section 33 of the Mines and Minerals Act 2005is renewable for three consecutive ten-year periods.
The stage one of a two-stage approved program will target a minimum of 500,000t a year production rate to recover around 10,000ct a year, at a minimum average value of $750 per ct, the company said.
A maiden inferred resource will also be produced as part of stage one production at Lemphane and a definitive feasibility study for the second stage.
The Lemphane’s mining lease will be held by Meso Diamonds, which is 85%-owned by Paragon and 15%-owned by local Basotho shareholders.
Under the terms of the mining lease deal, the Lesotho Government will hold 20% of the project, of which 10% will be free carried and the other 10% will be funded through project dividends.
Chairman of Paragon Diamonds, Martin Doyle said: "As well as generating significant revenues, Stage 1 production is expected to increase the average value per carat (a consequence of the higher amount of tonnage mined), build on the robust economics already identified and also provide a bankable Mineral Resource."
