Lucara Diamond backs Karowe expansion amid market slump

Canada’s Lucara Diamond (TSX: LUC) is pressing ahead with its plan to extend the life of the Karowe mine in Botswana after an updated feasibility study showed the underground project could recover 4.5 million carats over a 10-year mine life.The reviewed study reinforces Lucara’s strategy to expand Karowe despite a rapid global downturn in the diamond industry marked by halted operations, falling revenues and rising competition from lab-grown stones that have cast doubt on diamonds’ long-term appeal.Open-pit mining at Karowe is expected to end before June, after which surface stockpiled reserves will be processed while underground operations ramp up to commercial production, the company said.“We look forward to continue recovering large, exceptional diamonds from the underground project,” president and CEO William Lamb said, noting Karowe is the only mine globally to have recovered nine diamonds weighing more than 1,000 carats each.Lab-grown gems put squeeze on diamond mining industryThe underground expansion is expected to generate revenue and cash flow through 2038, with a pre-production capital cost of $779 million, of which Lucara has already spent $436 million over the past five years. The remaining $343 million is expected to be funded through operating cash flow, along with potential equity or debt financing, as the company works with existing lenders and its major shareholder to evaluate options.The project carries an after-tax net present value of $432 million. Once underground production begins in the first half of 2028, Lucara expects the operation to generate more than $1.3 billion in net income over its life.Lamb said the mine plan targets the highest-value domain of the South Lobe of the AK6 kimberlite, which continues at depth below the open pit. The underground operation is designed to support a 2.85-million-tonne-a-year mine and processing plant as surface mining winds down in the first half of this year.Massive diamonds sourceSince it began operations, Karowe — which means precious stone in the local language — has produced some of the world’s most remarkable diamonds. These include the 1,758-carat Sewelô in 2019, the 1,109-carat Lesedi La Rona in 2015, and the 813-carat Constellation, also recovered in 2015. Karowe has also yielded Botswana’s largest fancy pink diamond to date, the Boitumelo.The operation remains one of the world’s highest-margin diamond mines, producing an average of 300,000 high-value carats each year.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com