*Lucara’s Karowe mine life extended to 2040
In a recent updated technical report, Lucara Diamond Corporation has announced that the underground project at its Karowe diamond mine has the potential to recover 4.5-million carats over a ten-year mine life.
With the open pit reserves expected to be depleted by latest 2026, Karowe underground project officially started in 2020 with production expected to begin in the first quarter of 2028.
Until then, Lucara will process ore that was stockpiled during open-pit mining. The full underground production is anticipated to begin in the first half of 2028.
With the open pit having been operational since 2012, the underground project is expected to extend the overall mine life to at least 2040.
“This reinforces our strategic decision to extend mine life and continue to generate benefits for our stakeholders. Karowe is a world-class mine therefore we look forward to continue recovering large, exceptional diamonds from the underground project,” said Lucara President and Chief Executive Officer William Lamb, referring to Karowe having been the only diamond mine in the world to recover nine diamonds larger than 1 000 carats in weight.
The underground project at Karowe is estimated to generate revenue and cash flow to 2038 for a pre-production capital cost of $779-million. Lucara has already spent $436-million on the underground project over the last five years.
Lamb anticipates that the remaining pre-production capital costs of $343-million will be funded through a combination of operating cash flow, as well as new equity or debt financing.
The company is collaborating with existing lenders and its major shareholder to consider its financing options.
The underground project currently has an after-tax net present value of $432-million.
Once production from the underground project starts in the first half of 2028, the company expects to generate more than $1.3-billion in net income over the mine life of the project.
Lamb explains the underground project is focused on the highest value domain of the South Lobe of the AK6 kimberlite which continues at depth below the open pit.
The project is being designed to support the operation of a 2.85-million-tonne-a-year underground mine and processing plant, particularly as the Karowe open pit mining operations come to an end in the first half of this year.
