Lucara strikes again with 378 carat diamond at Karowe

Lucara strikes again with 378 ct diamond at Karowe
The unbroken Type IIa 378 ct gem quality top white diamond was recently recovered from milling of ore sourced from the M/PK(S) unit of Karowe’s South Lobe. (Image courtesy of Lucara Diamonds.)

Canada’s Lucara Diamond (TSX:LUC) has unearthed an unbroken 378-carat white gem-quality rock, the second major stone found so far this year at the company’s prolific Karowe mine in Botswana.

The diamond, described by Lucara as “magnificent” and “superb”, was found from milling of ore sourced from the M/PK(S) unit of the mine’s South Lobe. This is the same area where the Vancouver-based miner found an unbroken 341-carat diamond on January 15. Both gems were recovered from the coarse X-ray transmission circuit.

Lucara says the find is a further testament to the strong resource and process circuit performance at Karowe.

It is the 55th stone over 200 carats recovered at Karowe since it began commercial operations in 2012

“The 378 carat joins a rare and special lineage of exceptional, high value diamonds recovered at Karowe and continues to highlight the wonderful diamond potential of Botswana,” chief executive Eira Thomas said in a media statement. 

BMO Capital Markets analyst Ray Raj said the diamond, the 55th stone over 200 carats recovered at Karowe since it began commercial operations in 2012, could fetch over $15 million.

Previous historic recoveries include the 342-carat Queen of the Kalahari, the 549-carat Sethunya, the 1,109-carat Lesedi La Rona found in 2015, and the 1758-carat Sewelô, recovered in 2019.

Beyond Sewelô, the only larger diamond ever unearthed is the 3,106-carat Cullinan Diamond, discovered in South Africa in 1905. The Cullinan was later cut into smaller stones, some of which now form part of British royal family’s crown jewels.

Thomas noted that the continued recovery of large diamonds at Karowe comes at a critical time for the sector. It also provides an additional foundation to the opportunity to finance and build the underground expansion, she said.

Karowe’s highest value section

Botswana renewed Lucara’s mining license earlier this month for another 25 years, which allowed the company to move Karowe’s underground expansion project to its execution phase.

“With the sales process for the 549ct/998ct stones recovered [in] 2020 also to be concluded in 2021, Lucara’s cash flow potential is looking strong which is likely to support efforts to secure a financing package for the underground expansion,” BMO’s Raj wrote in a note to investors.

The $514 million-underground extension of the mine is expected to take five years and extend Karowe’s productive life for at least another 13 years after the open pit ceases operations in 2026.

The development will allow Lucara to exploit the highest value part of the orebody first and generate over $5.25 billion in gross revenue.