LUCAPA Diamond Company is to suspend production at its Mothae mine in Lesotho as procurement of supplies and equipment would be affected by the 21-day lockdown taking place from March 26 in neighbouring South Africa.
South African president, Cyril Ramaphosa, ordered the lockdown on March 23 in an effort to slow the spread of the COVID-19 virus.
Said Lucapa in an announcement: “The lockdown will impact the ongoing operations of the Mothae kimberlite diamond mine … particularly on the flow of essential mining supplies and services across the border from South Africa”.
Mining and processing operations could be restarted “relatively quickly” should a decision be taken to reopen the mine in the near-term, it said.
There was a risk that the lockdown could trigger default clauses in Lucapa’s loan agreements. However, it was in discussions with the South African government-owned Industrial Development Corporation in respect of restructuring debt. “The negotiations are at an advanced stage,” it said.
Lucapa was also in discussions with two of its biggest shareholders, New Azilian and Equigold, regarding their corporate loan facilities.
Lucapa said earlier this month that it planned to raise about A$6.7m in order to fund exploration of its Lulo deposit in Angola.
The funds will be raised through a A$2.8m share placement with “… sophisticated institutional investors”. Some 25.9 million shares were issued at a price of 11 Australian cents per share – an 13% discount to the firm’s then 30-day volume weighted average share price.