The underground expansion at the mine is estimated to require an investment of $514m


Lucara recovered 378 carat top white gem diamond from Karowe mine in January. (Credit: Lucara Diamond)

Lucara Diamond has secured $220m financing to fund the underground expansion at its 100% owned Karowe mine (Karowe) in Botswana.

As part of the total financing, the company will receive a project finance facility of $170m to fund the development of the underground project.

The Vancouver company will also be provided a working capital facility of $50m to support the on-going operation of the Karowe open pit mine.

Fully commissioned in the second quarter of 2012, the Karowe diamond mine is expected to support open pit operations to 2026 with further underground potential to 2040.

With a five-year development period, the underground expansion programme at the mine is estimated to require an investment of $514m.

First ore from the underground project is expected to be drawn in 2026.

Lucara Diamond president and CEO Eira Thomas said: “Securing credit commitments for the arrangement of +$200 million senior debt facilities from five leading international financial institutions, with significant mining and metals track records and experience in Africa, is an important achievement for Lucara and a strong endorsement of our underground expansion plans.”

In January, Lucara received approval from the Botswana government for mining license renewal in respect of the Karowe mine.

Effective from 4 January 2021, the license has been renewed for a period of 25 years to 2046.

Thomas said: “The Karowe diamond mine remains one of the world’s highest margin diamond mines and in just over eight years of production, has yielded 4 of the 10 largest diamonds in recorded history, including the 1,758 carat Sewelô, the largest diamond recovered from Botswana, and the 1,109 Lesedi La Rona which sold for US$53 million.”

In November 2019, the company released a positive underground feasibility study (FS) for the underground expansion project.

The project is anticipated to double the mine life, generating significant revenue and cashflow out to 2040.