Lucapa has just released guidance for 2021 that suggests it will more than double output compared to 2020, with a target of between 40,400-42,600 carats attributable production.
The company's 70%-owned Mothae mine in Lesotho was suspended for six months, in part to allow an upgrade, and both the Mothae and the 40%-owned Lulo alluvial mine in Angola were impacted by COVID-19 restrictions.
Lucapa expects that both operations will operate at their new expanded capacities this year.
The average diamond price is expected to rise from last year's US$745/ct to between $957-1034/ct due to a stronger gemstone market.
Cash operating costs are expected to fall from $878/ct to between 638-657/ct, with Lucapa looking to turn a A$4 million loss into a cash operating margin of $17-21 million from revenue of $50-56 million.
All-in sustaining costs are expected to be US$660-657/ct.
The company has announced a A$6-9 million exploration and development budget, including $3 million at Lulo. Merlin will be the other focus.
A growth budget of $5-8 million includes the recently completed Mothae expansion to 1.6Mtpa and plans for a new screening plant that will help reduce haulage costs at Lulo's Mining Block 46.
Lucapa launched a successful $20 million placement at 5c late last week, and yesterday decided to launch a share purchase plan to raise up to $3 million.
Merlin is costing almost $10 million to purchase from the liquidator of Merlin Diamonds, including fees and charges, and comes with a 24sq.km mining lease and equipment, and 283sq.km of surrounding exploration tenure, some 700km south-east of Darwin in the Northern Territory.
Lucapa believes resurrecting Merlin will be transformational, giving it control over a third asset where there are resources of 4.4Mct and numerous anomalies in a well-endowed diamondiferous province.
Merlin was mined by Rio Tinto and Ashton Diamonds between 1999-2003, producing over 500,000ct, including Australia's largest mined rough diamond on record.
There are 11 kimberlite pipes within the mining lease, and two known in the Orbit permit.
Merlin Diamonds was advancing a restart before it hit money woes.
Lucapa's initial plan is to use its early experience at Mothae as a model, with plans for a 1.1Mtpa plant to treat 13.8Mt over 13 years from a number of open pits.
The deal comes with conditions, including the lease of a mortgage over the mining lease, but is expected to be completed in the second half of the year.
As part of the placement, directors Miles Kennedy, Ross Stanley, Stephen Wetherall, and Nick Selby will seek permission to subscribe for $800,000 worth of shares.
Lucapa will own 100% of the operation, however Legend International Holdings holds a buy-back option for a 51% interest where resources considered by a prefeasibility study have an in-situ value exceeding $1 billion. There are milestone payments due linked to bulk sampling.
Lucapa's cash and diamond sales receivables at March 31 totalled $12.2 million.
Lucapa's shares, which have traded between 4.2-9c over the past year were last traded at 5.3c, valuing it at $46 million.
