Paragon Diamonds Ltd Government approval for acquisition of Mothae


 
TIDMPRG 
 
Paragon Diamonds Limited / Index: AIM / Epic: PRG / Sector: Resources 
 
7 August 2015 
 
             Paragon Diamonds Limited ('Paragon' or the 'Company') 
 
                 Government approval for acquisition of Mothae 
 
Paragon Diamonds Limited, the AIM quoted diamond development company, is 
pleased to announce that further to the announcement of 14 July 2015, the 
Company has now obtained the necessary formal approval from the Government of 
Lesotho to complete the acquisition of a 75% interest in, and operatorship of, 
the defined Mothae Kimberlite Resource ('Mothae') from Lucara Diamond 
Corporation, a TSX quoted mining company (the "Acquisition").  Mothae is only 5 
km from the world class Letseng diamond mine in Lesotho which is located within 
a cluster of kimberlites, including Paragon's Lemphane Kimberlite Pipe Project 
('Lemphane'). 
 
Mothae represents a low cost opportunity to fast track Paragon's strategy to 
build a leading vertically integrated diamond house and to generate significant 
value for shareholders through the recovery of large high value diamonds. With 
Government approval received, the Company will now proceed with the 
finalisation and subsequent completion of the Acquisition.  Once completed, the 
Company will develop and commence production at both Mothae and Lemphane 
simultaneously to take advantage of economies of scale, thereby minimising 
costs.  In the first full year of production, Paragon is targeting combined 
revenues of approximately US$36 million from both Mothae and Lemphane. 
 
Paragon's Executive Chairman, Philip Falzon Sant Manduca said "The process to 
obtain formal approval to acquire Mothae took longer than all parties 
anticipated, having received verbal approval from the Minister at my meeting 
with him on the 22 June 2015. In any event, with the approval now to hand, we 
can now progress the acquisition and development of Mothae. 
 
"We have to conclude the funding for both mines promptly, which indeed, is one 
of the conditions for the Ministry's approval.  We have several serious level 
discussions occurring simultaneously, in addition to the original MOU signed 
with ITGT in Dubai. We will be updating shareholders as soon as we conclude one 
of these funding discussions as soon as practicable as we look to secure the 
optimal investment partner for Paragon, not just over the next 18-24 months, 
but also thereafter as we transition into full production at both assets. 
 
"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. 
 
"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. Indeed, I think a valid analogy is that Paragon could 
be viewed, by those seeking to invest in the currency of diamonds,  like a 
central bank, producing a financial currency, whilst our distribution approach 
downstream is akin to a commercial banking system through which real wealth can 
be acquired and stored in that currency. 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." 
 
                                   **ENDS** 
 
For further information please visit www.paragondiamonds.com or contact: 
 
Philip Falzon Sant           Paragon Diamonds          +44 (0) 20 7182 1920 
Manduca                Limited 
 
Simon Retter                 Paragon Diamonds          +44 (0) 20 7182 1920 
                       Limited 
 
David Hignell                Northland Capital         +44 (0) 20 7382 1100 
Gerry Beaney           Partners Limited 
                             (Nominated Adviser) 
 
John Howes                   Northland Capital         +44 (0) 20 7382 1100 
Mark Treharne          Partners Limited 
                             (Sales and broking) 
 
Felicity Winkles             St Brides Partners        +44 (0) 20 7236 1177 
                       Limited 
 
Frank Buhagiar               St Brides Partners        +44 (0) 20 7236 1177 
                       Limited 
 
 
 
END
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