PRG Paragon Diamnd

 
TIDMPRG 
 
Paragon Diamonds Limited / Index: AIM / Epic: PRG / Sector: Resources 
 
 7 October 2015 
 
             Paragon Diamonds Limited ('Paragon' or the 'Company') 
 
                    Corporate and Mothae acquisition update 
 
Paragon Diamonds Limited, the AIM quoted diamond development company, announces 
an update and progress regarding the proposed acquisition from Lucara Diamond 
Corporation ('Lucara') of the Mothae Kimberlite Resource ('Mothae'), which is 
only 5 km from the world class Letseng le Terai Diamond Mine in Lesotho, and 
the Company's nearby Lemphane Kimberlite Pipe Project ('Lemphane'). 
 
Lucara has agreed to extend exclusivity based upon an appropriate timetable for 
Paragon to complete their US$15 million funding package with Acrux Resources 
Proprietary Limited ('Acrux'), announced on 2 October 2015, and Lucara reserves 
its rights to terminate exclusivity based upon any deviation from this 
schedule.  Upon completion of the financing Paragon will pay Lucara an initial 
US$2 million of the US$6.5 million due. 
 
In addition the Company has agreed an extension to the short term GBP500,000 loan 
facility to 18 November 2015 in order for the proposed Acrux funding package to 
be executed. If Paragon repays the loan after the 14 October 2015 then it will 
issue the provider a further 3,571,428 detachable call warrants with a strike 
price of 7 pence per share. 
 
These extensions place the Company in a good position to execute its strategy 
and complete the acquisition of Mothae on the terms previously announced. The 
Company will make further announcements regarding the Acrux funding package and 
the acquisition of Mothae as soon as practicable. 
 
Paragon Diamonds Finance Director Simon Retter said: "Both Acrux and Paragon 
are committed to concluding the funding arrangements which we announced on 2 
October 2015, subject to the conditions of the Term Sheet, as soon as 
practicable. The Company is progressing activity at both Lemphane and Mothae 
and there should be no delays in bringing plant and other equipment, including 
the use of two technologically advanced XRT machines to site. We currently have 
no plans to procure additional funding in order to commence production nor to 
cover existing overheads. 
 
"With the reduction in the purchase price for Mothae, revised terms of payment 
with Lucara, and other working capital and capital expenditure efficiencies 
identified, we are well placed to deliver on our strategy. Our mining plan at 
Mothae has been independently reviewed by MSA and indeed improved on our 
original estimation of the economics of the project. 
 
"We have also secured a letter of commitment for funding for the majority of 
stage two financing for both projects as announced on 30 September 2015. So, 
the Board believes that Paragon is now in an exceptionally strong position, 
looking forward to production in 2016 at both assets. I believe we have made a 
large amount of progress over the last 12 months and that significant value has 
been added to the Company over this time." 
 
                                   **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 
 
Notes 
 
Paragon Diamonds has an 80% interest in the Lemphane Kimberlite Pipe project in 
Lesotho, located close to the world class Letseng mine, Lesotho's largest 
diamond mine.  Lemphane is the last known kimberlite to be developed in 
Lesotho.  The first of a two stage production programme is expected to commence 
in 2015 which will further define the resource at Lemphane. As increased 
tonnages of kimberlite are processed the proportion of larger diamonds 
recovered will improve, increasing the average value of diamonds recovered at 
the project, as was the case at Letseng. In addition to Lemphane, Paragon 
Diamonds has signed a Memorandum of Understanding with Lucara Diamond 
Corporation, a TSX quoted mining company, to acquire a 75% interest in and 
operate the defined Mothae Kimberlite Resource, which is located only 5 km from 
the world class Let?eng le Terai diamond mine in Lesotho. 
 
 
 
END 
 

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