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Lucara board approves $514m Karowe mine expansion

Karowe mine. (Image courtesy of Lucara Diamond)

Canada’s Lucara Diamond (TSX: LUC) has announced its board has formally accepted a planned underground expansion of the Karowe mine in Botswana, which is expected to extend the operation’s life for 20 years — until 2040.

The Vancouver-based miner said the approval follows the financial closure and satisfaction of all conditions precedent to a $220-million debt package, announced in July.  

Lucara said the first $170 million would be available in mid-September, adding that total costs will be largely covered via a combination of loans, cash resources and equity financing. 

Moving Karowe underground will allow Lucara to exploit the highest value part of the orebody and extend the mine’s life for 20 years — until 2040

Moving Karowe underground, a plan announced in late 2019, will allow Lucara to exploit the highest value part of the orebody first. This would generate over $5.25 billion in gross revenue, chief executive officer Eira Thomas has said. 

The company noted that construction efforts had ramped up since the facilities’ documentation was executed in mid-July. 

The pre-sinking of ventilation is underway and a total of four blasts have occurred to date with continued drilling, mucking, and installation of ground support on a 24-hour basis, the company said, adding that it is mobilizing the remaining pre-sinking equipment and contractors. 

Lucara says Karowe remains one of the highest-margin diamond mines in the world, producing an average of 300,000 carats each year.  

The mine, which began commercial operations in 2012, has already become the only one in recorded history to have yielded two 1,000+ carat diamonds — the 1,758 carat Sewelô in 2019 and the 1,109 carat Lesedi La Rona in 2015, which sold for $53 million.