PRG.L Share News (PRG)

(ShareCast News) - Miner Paragon Diamonds said South Africa's Mothae kimberlite project, which it is hoping to acquire, could be "significantly" larger than first expected and also more profitable.Two technical reports by the respected MSA consultancy have exceed management's initial expectations and indicate that not only does Mothae have the potential to significantly increase its net present value (NPV) from Paragon management's original estimates, but also at a lower costs.The studies indicated an improved strip ratio of less than 1:1, compared to 1.5:1 previously assumed, which would make the mine more profitable.The studies suggested Mothae, which is only 5km from the world class Letšeng diamond mine in Lesotho, has the potential for average diamond values up to $2,000 per carat.Several mining scenarios thrown up by the studies exceeded 20m tonnes (Mt) at $40-plus tonnes of ore value in a low operating cost mine exceeding 2Mt and 40,000 carats per year.Paragon said the studies were intended to form components of a future preliminary economic assessment (PEA) and pre-feasibility Study (PFS), with final plant and open pit design work still to come.Management said the due diligence stage had been completed in negotiations with several funding providers to secure the cash to acquire a 75% ownership interest in Mothae from Toronto-listed Lucara Diamond Corporation, while funding talks over its existing Lemphane Project are also expected to conclude soon.An update will be provided to investors before the end of September.Managing director Stephen Grimmer said the technical reports clearly showed the potential for a significant percentage of carats present in large diamonds."It is important to note that in the 'best estimate' case, the report caps all diamonds above 20 carats at $6,492 per carat value - even in the 'upside scenario' all diamonds above 20 carats are still capped at $11,057 per carat."