A mine known for producing the biggest diamond in Australia’s history is set to break ground on a long-awaited restart in the Northern Territory in 2025.
Lucapa Diamond Company is the driving force behind the project, which involves restarting the historic Merlin diamond mine 80km south of Borroloola in the Northern Territory.
Originally discovered by Ashton Mining and subsequently acquired by Rio Tinto, the Merlin mine operated from 2000 to mid-2003 during which time it produced about 500,000 carats (100kg) of high-quality diamonds.
The shuttered mine was then sold to Striker Resources, which entertained but ultimately nixed the idea of a restart.
After sitting dormant for nearly 20 years, Merlin found itself in the hands of Lucapa, which snapped up the project for $8.5 million in 2021.
Lucapa is known for its operation of the Lulo alluvial diamond mine in Africa, which is currently the subject of an exploration project searching for previously untapped potential.
In 2017, Lucapa first dipped a toe into the Australian diamond mining sector with the acquisition of the Brooking exploration project in the Kimberly region of Western Australia, an area known for producing diamonds – most notably the now-closed Ellendale mine.
The foray has inspired a greater hunger for Australian diamonds in the miner, which has now completed a scoping study for Merlin anticipating a 14-year mine life and a 4.4 million-carat resource.
Lucapa had completed a feasibility study for Merlin at the end of 2023 but decided market conditions weren’t quite right for a restart.
All that changed when the company declared Merlin would come back online in 2025 with a two-phase plan.
In the first phase, Lucapa will spend 18 months excavating and dredging up to 15m from the base of five existing open pits at Merlin.
The second phase will be spent extracting ore over a two-year period with a focus on the project’s Gawain pit.
Lucapa is currently engaging several interested parties in funding options, including selling a royalty on production, joint venture partnerships and government debt financing.
The miner hopes to shore up around $35 million to fund both phases of the restart and will continue working to increase Merlin’s mineral resource until the funds are secured.
