PRG.L Regulatory News (PRG)

Paragon Diamonds Limited / Index: AIM / Epic: PRG / Sector: Resources 13 November 2013 Paragon Diamonds Limited ("Paragon" or the "Company") Lesotho Subsidiary Board Changes Paragon Diamonds Limited, the AIM quoted diamond development company inLesotho, Africa, is pleased to provide an update on the composition of theBoard of Meso Diamonds (Pty) Ltd (`Meso'), the Company's 80% owned Lesothosubsidiary. The Government of the Kingdom of Lesotho holds the remaining 20%interest in Meso, which was recently granted the Mining Lease 009/2013 over theLemphane Kimberlite Diamond Project (`Lemphane') where Stage 1 production oflarge high value stones is due to commence in the near term. In line with the terms of the Mining Lease, two Government nominees, MrMothabathe Hlalale and Mr Tšepang Mara, have been appointed to the Board ofMeso as non-executive directors with immediate effect. Mr Mothabathe Hlalale(Mosotho), a graduate in law from the National University of Lesotho,previously served as a District Officer and as a Senior Legal Officer in theGovernment of the Kingdom of Lesotho. Most recently, he has been active as abusinessman and entrepreneur in Lesotho, involved in property development,agribusiness and service delivery in utilities, especially electrification. MrTšepang Mara (Mosotho) is a professional in the fields of Law and HumanResources. He qualified from the Lesotho Institute of Public Administration &Management and currently serves as Public Prosecutor for the Lesotho LawOffice. To date, Mr Mara has spent his career in public service, in the legal,human rights and human resources fields. In addition, Paragon has nominated and Meso has approved the appointment of twofurther non-executive directors to join the Board of Meso: Mr Philip FalzonSant Manduca (British), who was recently appointed Executive Chairman ofParagon; and Mr Simon Retter (British), who is currently Finance Director ofParagon. Dr Stephen Grimmer (British), currently Managing Director of Paragon and Mr SamMatekane, (Mosotho) currently Chairman of Matekane Mining and a 10% shareholderof Paragon, will both continue as Directors of Meso. Dr Grimmer will take upthe role of executive Chairman of Meso. The position of executive ManagingDirector of Meso has been created and will be filled in due course. Mr NicholasBaggott (British), who has served as security manager for Meso will stand downas a Director of Meso with immediate effect. Paragon MD Stephen Grimmer said: "I welcome the appointment to the Board ofNtate Hlalale and Ntate Mara, and look forward to their engagement andcontribution in building Meso Diamonds, alongside of Paragon, into a successfuldiamond mining company to the benefit of all shareholders and stakeholders. Ialso welcome my colleagues Mr Falzon Sant Manduca and Mr Retter onto the Boardat this crucial stage in the development of the Company, as we fast-trackLemphane towards Stage 1 production in H1 2015 and in the process confirm itscredentials as the next world class pipe in Lesotho. I also appreciate greatlythe continuation of Ntate Matekane as a Director; he brings a wealth of localbusiness and mining experience to the Board. Finally I thank Mr Baggott for hisdedicated service to the Company over the last three years and look forward tohis continued contribution in a managerial role." **ENDS** For further information please visit www.paragondiamonds.com or contact: Philip Falzon Sant Paragon Diamonds Limited +44 (0) 20 7182 1920Manduca Simon Retter Paragon Diamonds Limited +44 (0) 20 7182 1920 Edward Hutton/Gerry Northland Capital Partners +44 (0) 20 7382 1100Beaney Limited John Howes/Charles Northland Capital Partners +44 (0) 20 7382 1100Laughton Limited Felicity Winkles St Brides Media and Finance Ltd +44 (0) 20 7236 1177 Frank Buhagiar St Brides Media and Finance Ltd +44 (0) 20 7236 1177 Notes Paragon Diamonds has a pipeline of projects in Lesotho, Botswana and Zambia,the most advanced of which is its Lemphane Kimberlite Pipe Project in Lesotho,located close to the world class Letšeng mine, Lesotho's largest diamond mine.Lemphane is the last known world-class sized kimberlite to be developed inLesotho. Among the stones recovered in the Company's 2013 bulk samplingprogramme were several large high value stones of up 8.9 carats in size andindividual diamond values in excess of US$2,400/ct have been achieved,demonstrating the potential for Lemphane to hold large and valuable diamonds.The first of a two stage production programme is currently expected to commencelate 2014 (subject to financing) which will further define the resource atLemphane. As increased tonnages of kimberlite are processed the proportion oflarger diamonds recovered will improve, increasing the average value ofdiamonds recovered at the project, as was the case at Letšeng. Stage 1 production will cover a two year period during which approximately 1 Mtof kimberlite will be mined and processed out of the currently estimated 48.6Mtof kimberlite (to 350m depth) at the site, using a 75 tonne per hour processingplant. The Company is targeting 20,000 carats during Stage 1 production with anestimated minimum value of US$930 per carat that is expected to generaterevenues in excess of US$9m per annum. Cash flow will be reinvested to furtherdevelop Lemphane and complete a bankable feasibility study, a 3D geologicalmodel and a substantial inferred resource ahead of commencing the Stage 2production phase. Stage 2 will see production ramped up to 3Mt/year with peakproduction expected to hit 65,000 carats per year of high value diamonds. It is the intention of the Company to become a fully integrated diamond companymaximizing the margins gained from being exposed from the mining to selling ofdiamonds.