Name of the Project
Karowe diamond mine underground expansion.

Location
Botswana.

Project Owner/s
Lucara Diamond Corp.

Project Description
The Karowe mine is an existing conventional drill-and-blast openpit operation, with diesel excavators and trucks providing an average of 2.6-million tonnes a year of kimberlite feed for the mill. The openpit mine operation is expected to terminate in mid-2025, ending at an elevation of about 700 m above sea level.

The combined openpit and underground indicated resource is estimated at 54.27-million tonnes at 15.3 carats per hundred tonnes for a contained diamond resource of 8.3-million carats, excluding stockpiles.

The feasibility on the proposed project has focused on the substantial resources remaining below the economic extents of the openpit.

Longhole shrinkage underground bulk mining has been selected to provide early access to higher-value ore and allow for a short payback period.

The underground project is designed to access the South lobe kimberlite resource below the current planned bottom of the openpit, which is expected to be at about 700 m above sea level, to a depth of 310 m above sea level.

Access to the South lobe underground will be through two vertical shafts – production and ventilation – of about 765 m and 715 m respectively.

All underground mined kimberlite will be processed at the existing Karowe processing plant over a 13- to 15-year period, following the cessation of the current openpit operations, which is expected to occur in 2025.

Life-of-mine production (remaining openpit and underground) is estimated at 7.8-million carats.

The underground expansion is expected to extend Karowe’s mine life by 15 years.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a 5% discount rate, of $718-million, with a payback of 2.8 years, for the combined openpit and underground mine.

Capital Expenditure
Preproduction capital costs for the underground project are estimated at $513.7-million.

Planned Start/End Date
Based on construction starting in mid-2020, ore from underground mining will seamlessly integrate into current operations providing mill feed in 2023, with a ramp-up to 2.7-million tonnes a year to the processing plant by 2026.

Latest Developments
The mining licence renewal application for Lucara Diamond Corp and Lucara Botswana’s Karowe mine, in Botswana, has been approved, and is effective from January 4 for 25 years.

This secures Lucara’s mining rights until 2046 and marks a critical step in the formal sanction of the Karowe underground expansion project.

Lucara president and CEO Eira Thomas has said that the receipt of the mining licence renewal and extension is an important milestone for the Karowe underground expansion project, and “paves the way for the completion of a supplemental debt financing and full project sanction” later this year.

The Karowe underground expansion project, which continued to advance in 2020 under a revised $22-million budget in response to the Covid-19 pandemic, focused on time critical path items, detailed engineering and design, and limited earthworks and geotechnical studies.

Lucara continues to explore debt financing options for the underground expansion for those amounts which are expected to exceed the company's cash flow from operations during the construction period.

Financing is expected to be in place by the second half of 2021.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Lucara Diamond Corp investor and public relations, tel +1 604 689 7842 or email info@lucaradiamond.com.