Lucara Diamond to borrow for Karowe underground expansion

Lucara Diamond Corp. (TSX:LUC) anticipates incurring debt of between US$150 million and US$200 million towards the US$514-million underground expansion of the Karowe diamond mine in Botswana. The Vancouver company has already initiated discussions with potential lenders, and hopes to secure funding in the second half of this year. The balance of the project will be funded by cash flow from current open pit operations.

Open pit operations will continue through 2025, before the underground plant feed is needed. Lucara released a feasibility study for the underground project in November 2019. Last year the company spent US$18.7 million on site earthworks, geotechnical test pitting and drilling, and individual pilot holes for the ventilation and production shafts. Orders were also placed for long lead time equipment.

Five years of underground development is planned from now through 2025. To reach the mining area, a 7,200-tonnes per day shaft approximately 750 metres deep will be sunk for longhole shrinkage mining. Underground production will take place over 13 years.

Lucara has its eye on recovering kimberlite from about 400 metres of the AK6 deposit South Lobe beginning at 700 metres below surface, which will be the bottom of the depleted open pit. An estimated 33.5 million tonnes of ore grading 15.1 carats per hundred tonnes and having a value of US$725 per carat will be mined. A total of 5.05 million carats are to be recovered from underground resources.

The mineral processing plant has the capacity to handle the anticipated throughput from the underground mine. Laboratory testing has confirmed that existing autogenous grinding circuit is sufficient to treat the deeper underground ore.

The Karowe mine is known for its production of large, high quality Type IIA diamonds, including the historic 1,758-carat Sewelô, the 1,109-carat Lesedi La Rona, and the 813-carat Constellation.

The Botswana government has extended the Karowe mining licence to 2046. Underground production is currently planned to 2040.