Lucapa renegotiates repayment terms of $7.5m Equigold debt as waits on diamond market lift

LUCAPA Diamond Company has renegotiated repayment of a $7.5m loan with its Singaporean shareholder, Equigold, in terms of which it will extend the repayment period – releasing pressure on the company to sell diamonds at a time when the market is poor.

In terms of the agreement, the $7.5m will be repaid in eight quarterly instalments of $0.9m each instead of four instalments of $1.9m. The next repayment is deferred to 1 April 2020, with the final of the eight scheduled payments now due on 1 January 2022.

The net effect will be to defer until 2021/22 a total of $4.7m in capital repayments which would have otherwise been payable by Lucapa to Equigold in 2020, the company said.

Lucapa used the 2017 Equigold loan to help finance the development of its 1.1 million ton a year per Mothae kimberlite mine in Lesotho.

“The amended loan repayment schedule will give Lucapa and its respective project partners additional flexibility in both the scheduling of rough diamond tenders and the sale of select manufactured diamonds under the group’s cutting and polishing strategy,” said Lucapa MD, Stephen Wetherall, in a statement.

The diamond market is currently in the doldrums but the approaching festival season starting with Diwali and extending through to Thanksgiving and Christmas/New Year is expected to presage a revival in fortunes.

Lucapa said on October 9 that it had produced record production for the three months to end-September with best ever numbers flowing from Mothae mine.

Just over 7,000 carats were recovered at Mothae and a further 7,603 carats at the firm’s Lulo alluvial mine in Angola – its second best quarterly performance – taking the total for the quarter to 14,610 carats, the firm said.

“The results are in line with Lucapa’s strategy of expanding high-value diamond production to maximise revenue generation,” it said in a report. Some 432 diamonds of 4.8 carats or larger were recovered, including 136 specials defined as 10.8 carat or larger diamonds.