. Buoyant on mine underground project
. Karowe mine license extended to 2046
. $514 million is project estimated budget
Lucara says during the year ended December 31, 2020 it spent over P200m ($18.7 million) on its Letlhakane-based Karowe mine’s underground expansion project.
Lucara revealed the developments on its Quarter 4 2020 sales and operational results this week, saying the money was spent on project execution activities including a geotechnical test pitting and drilling and completion of two pilot holes at the shaft locations.
The company is embarking on mining underground at its wholly-owned top gemstone producer based in Botswana in effort to expand mine’s output level.
“The company was able to complete on-site earth works and geotechnical studies by using local contractors while a State of Emergency remained in effect in Botswana. Long lead time item orders were also placed for shaft muckers, and hoist and the winder refurbishment was also initiated. In addition, the power line engineering and detailed shaft design and engineering (consistent with the original targets for 2020) progressed,” the diamond company maintained.
Furthermore, the company said the government of Botswana swiftly approved the proposed power line route and granted a 25-year extension to the Karowe Mine License to 2046 as well.
“The recent recovery of two high value +300 carat stones continues to highlight extraordinary nature of the Karowe resource and underpin the rationale for the underground expansion, extending our mine life out to at least 2040. In late 2020, the Government of Botswana has also granted Lucara a mining license extension for 25 years,” said Lucara CEO and President, Eira Thomas.
Lucara said it has sufficient to cover the remaining open-pit life (to 2026) and the expected life of the proposed underground expansion, currently planned to 2040, thus more mining at Karowe.
“The company is actively exploring opportunities to arrange debt financing for the underground expansion for those amounts which are expected to exceed the company’s cash flow from the operations during the construction period. The underground expansion programme has an estimated capital cost of $514 million and a five-year period of development,” Lucara stressed.
Lucara Botswana Managing Director Naseem Lahri has said the positive results of underground feasibility study are motivating that the Karowe underground project will be realised. She said that in an effort to expand their mine, they would tap into new technologies as well. Meanwhile, the company said it has recorded $42.4 million in revenue during the Q4 of 2020.
The contribution to revenue includes diamonds sold through a combination of regular tenders, Clara, and through the HB Antwerp under the supply agreement announced in July 2020.
Lucara continues to have a strong availability of working capital, including $4.9 million in cash at the end of Q4 and $19.5 million available from a revolving term credit facility with no long-term debt.
Furthermore, Lucara Diamond Corporation revealed that mining and processing operations continued without interruption at the Karowe mine where more than 98% of workforce is Batswana.