Lucara Diamond readies for $195 million expansion of Karowe mine

Canada’s Lucara Diamond (TSX:LUC), the company that hit the jackpot in 2015 after finding the world’s second-largest diamond, is ready to begin planning a $195 million underground expansion of its Karowe diamond mine in Botswana as a preliminary economic assessment (PEA) revealed the feasibility of such project.

The PEA, published late Thursday, foresees total production of 2.72 million carats from 2026, once the current open-pit at Karowe is depleted.

The Vancouver-based miner said it expects to have the final PEA ready by the second quarter of 2018.

Lucara’s Karowe mine has quickly gained an industry reputation for producing large, flawless diamonds.

The company’s Karowe mine has quickly gained an industry reputation for producing large, flawless diamonds, fetching market prices high above the average realized for those found at Orapa mine, the world’s largest diamond mine, owned by Debswana, a partnership between De Beers and the government of Botswana.

Commercial production at Karowe began in 2012. Since then it has produced an average of 320,000 carats a year from the treatment of 2.5-million tonnes a year of ore from three kimberlite lobes.

The underground extension contemplates a sublevel caving operation to extract the AK06 kimberlite resource, with all kimberlite to be processed at the existing Karowe processing plant over a ten-year period.

The new section targets the South Lobe kimberlite resource below the current planned bottom of the open pit.

Botswana is the world's largest diamonds producer and the trade has transformed it into a middle-income nation.