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Merlin diamond mine in NT to sell for $8.5 million

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It sounds like a bargain. A diamond mining company, Lucapa Diamonds, has agreed to purchase the Merlin diamond mine in the Northern Territory. The company has other diamond interests in Angola and Lesotho.

The remote Australian mine is 720 kilometres south-east of Darwin and holds the record for producing Australia’s largest rough diamond – a 104-carat type-2A diamond. The mine has not been operational at any commercial scale since 2003.

The previous owner, a Melbourne businessman Joseph Gutnick, declared bankruptcy in 2016.

If the mine’s new owners are successful at restarting operations it will be Australia’s only operating diamond mine after the closure of the Argyle mine in November 2020.

Lucapa Diamonds managing director Stephen Wetherall said the Merlin mine was “well known” in the diamond industry.

“We’re interested in the general production and what else we can recover,” he said. “There are some 4 million carats in a JORC (industry certified) resource that we have analysed and believe that we can extract economically for many, many years to come.”

Lucapa’s takeover of the mine is conditional on the transference of native title rights and mining tenements, but the company is hopeful to commence production within 24 months. The operation is likely to employ “a few hundred people” when in full swing, said Mr Wetherall.