Lucara digs up 393 carat diamond at Karowe

Lucara Diamond (TSX: LUC) has recovered a 393 carat diamond from its company’s Karowe mine in Botswana, the seventh stone greater than 300 carats dug up at the operation so far this year. 

The top white Type IIa gem rock, found from direct milling of ore sourced from the M/PK(S) section of the South Lobe, is also third gem quality +300 carat produced from the unit. The other two are a 341 carat and a 378 carat top white gems both recovered in January. 

Type II diamonds are found less frequently and are more valuable than Type I diamonds, as they have no measurable nitrogen impurities. This gives them exceptional transparency and brilliance. 

“July’s recoveries continue a trend of strong diamond recoveries in May and June and, combined with several other high value stones still to be sold, bodes well for future revenue and cash flow potential,” BMO Metals and Mining analyst Raj Ray, wrote in a research note to clients today. 

The finds come at a crucial time for Lucara, which has begun spending on the US$514 million-underground expansion of Karowe, which began commercial operations in 2012.  

The project, expected to take five years, will extend the mine’s productive life for at least another 13 years after the open pit ceases operations in 2026. 

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

The Vancouver-based miner recently completed several major milestones ahead of kicking off underground expansion. On July 12, it secured a US$220 million finance facility and, three days later, it closed a $41.4 million (about US$33.1 million) equity financing.  

“Given that the remaining capex will be funded from cash flow from current open-pit operations and stockpiles (expected to continue until 2026), ongoing strong performances from the open-pit (as so far seen in 2021) are crucial to further de-risking Karowe underground,” Ray wrote. 

Lucara’s 2021 inventory of high-value stones includes two diamonds over 150 carat and four pink stones found this month, four greater than 150 carats recovered in June and six greater than 100 carats dug up in May.