Lucara Diamond Corp. [LUC-TSX, LUCRF-OTC] has announced an updated feasibility study for the underground project (UGP) at its Karowe diamond mine in north central Botswana, one of the world’s most prolific diamond-producing areas.
In a press release, Lucara said the underground expansion at Karowe is expected to double the mine life, and to generate significant revenue and cash flow out to 2040. It said the latest study is an update to the 2019 underground feasibility study and 2021 financial base case.
Lucara is a member of the Lundin Group of companies. The currently operating open pit mine at Karowe is a conventional load and haul operation. The mine is a producer of large, high-value type 2a diamonds. It is the only mine to have produced four diamonds in excess of 1,000 carats in size.
The open pit mine operations are expected to terminate mid-2025. However, the mine currently has over three years of surface stockpiled reserves, which will be consumed as required while the underground mine operations ramp up to commercial production.
Highlights of the updated UGP study include an extension of the mine life by 15 years, a pre-production capital cost for the UGP of US$683 million to be spent over an eight-year pre-production construction and commissioning period until the second half of 2027 (of which 3.5 years have already been completed).
The UGP is projected to generate US$1.1 billion in cash flow with total life of mine diamond recoveries estimated at 6.8 million carats.
“Lucara is excited to share the updated feasibility study for the Karowe Underground Expansion project, which reinforces our strategic decision to extend the mine life and continue to generate benefits for our shareholders,’’ said Lucara President and CEO William Lamb. “Karowe is a world-class mine, and we look forward to continuing to recover large, exceptional diamonds from the South lobe at Karowe.’’
The UGP is focused on the South lobe of the AK06 kimberlite. It is designed to support the operation of a 2.7 million tonnes per year underground mine and processing plant. Key features include an 8.5-metre finished internal diamond production shaft approximately 767 metres deep equipped to hoist a nominal 7,400 tonnes per day of ore and additional development waste.
Results of the updated UGP study were released after the close of trading on March 13, 2024, when Lucara shares rose 3.03% or $0.01 to 34 cents.The shares are currently trading in a 52-week range of 57 cents or 32 cents.
Lucara was in the news last year when it announced the recovery of a 1,080-carat diamond from its 100%-owned Karowe mine. It represented the fourth + 1,000 carat diamond recovered from the South Lobe of the AK6 kimberlite since 2015. Other notable recoveries include the 1,758 carat Sewelo (2019), a 1,174-carat diamond (2021) and the 1,109 carat Lesedi La Rona (2015).
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