Name of the Project
Karowe diamond mine underground project (UGP).

Location
Karowe diamond mine, north-central Botswana.

Project Owner/s
Canadian diamond mining company Lucara Diamond Corp.

Project Description
Lucara is developing a UGP at Karowe to extend the mine’s life and continue the production of large, high-value Type IIa diamonds. The UGP is focused on the highest-value domain of the South Lobe of the AK6 kimberlite, which remains open at depth. The project has a diamond reserve grade of 12.2 carats per hundred tonnes.

The project is designed to support a 2.85-million-tonne-a-year underground mine and processing plant to recover an estimated 4.5-million carats of diamonds over the UGP’s ten-year mine life. 

Mining will use a hybrid method, comprising longhole shrinkage drill-and-blast bulk mining, transitioning to block/free caving at higher elevations where unassisted caving is expected. 

The underground mine will use a combination of existing and newly built infrastructure at the mine. All current and planned surface installations have been designed to fully support the long-term operation of the underground mine and the processing plant.

Run-of-mine material will be handled by an underground jaw crusher and conveyor system to shaft skips, with surface conveying and rehandling to the plant and waste facilities.

The openpit is expected to terminate in the first half of 2026. Surface stockpiled reserves will be processed as required while the underground mining operations ramp up to commercial production.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax unlevered net present value, at an 8% discount rate, of $432.1-million.

Capital Expenditure
Preproduction capital costs to production are estimated at $779-million (over an eight-year preproduction construction and commissioning period), of which more than $436-million has been spent to date. The remaining preproduction capital costs of $343.2-million will be funded through a combination of operating cash flow, as well as new equity/debt financing. 

Planned Start/End Date
Production is planned to start in the first half of 2028, with full-scale output thereafter.

Latest Developments
Lucara has closed a $350-million senior secured bond issue, providing the financial certainty needed to progress the Karowe UGP to completion.

The five-year bonds carry a fixed coupon of 12.5% a year, with interest payable quarterly. Proceeds from the financing have been used to fully repay the company’s existing $220-million project finance facilities, simplifying Lucara’s capital structure while improving liquidity and flexibility.

The balance of the funds will be directed towards establishing a debt service reserve account covering two years of interest payments, as well as supporting the continued development of the Karowe UGP.

Beyond the immediate funding, the bond structure also provides additional strategic flexibility, including the option to raise a further $50-million through a tap issuance and the potential to add a $50-million revolving credit facility.

With the financing now in place, Lucara has secured access to sufficient capital to complete the underground expansion, subject to execution in line with its updated feasibility study.

Key Contracts, Suppliers and Consultants
JDS Energy & Mining Inc and leading independent consultants (updated feasibility study). Matthew Moss (P.Eng) (project manager and independent qualified person; and Lucara’s VP mineral resources and qualified person Dr Lauren Freeman.

Contact Details for Project Information
Lucara Diamond Corp. Tel: +1 604 674 0272. Email: info@lucaradiamond.com.