Name and Location
Karowe plant optimisation project, Botswana.

Client
Boteti Mining, a wholly owned subsidiary of Lucara Diamond Corporation.

Project Description
The Karowe mine located in north-central Botswana is part of the Orapa/Letlhakane kimberlite district – one of the world’s most prolific diamond-producing areas.

The mine plan is based on probable reserves of 33.1-million tonnes containing 5.1-million carats to a depth of 324 m.

The remaining indicated resource is estimated at 48.07-million tonnes containing 7.61-million carats from surface to a depth of 400 m. Inferred mineral resources are estimated at 21-million tonnes containing 3.04-million carats from 400 m to 750 m in depth.
The process plant has been designed with a throughput rate of 2.5-million tonnes a year. Diamond recovery is estimated at 400 000 ct/y.

The Karowe plant optimisation will improve large diamond recovery, following the discovery of exceptional stones, and enable sustainable processing of hard ore in the south lobe.

The project has a mine life of 13 years.

Value
The final capital expenditure for the development of the Karowe mine came in below the original budget of $120-million.

The Karowe plant optimisation is expected to cost up to $55-million to implement.

Duration
The Karowe mine is at full production.

Lucara expects the plant optimisation project to be completed in the second quarter of 2015.

Latest Developments
Lucara reports that the plant optimisation is progressing well.

The company has spent about $8-million and committed a further $27-million of expenditure to date.

Lucara forecasts that the plant optimisation project will cost up to $55-million, an increase from the previous guidance of $45-million to $50-million.

The additional cost includes the purchase of an additional XRT diamond-sorting machine, which will be installed early in the capacity of a large diamond recovery unit.

Once the optimisation project has been completed, this unit will be used as an audit machine and for future development work.

Lucara has also included costs to mitigate the impact of industrial action in South Africa’s steel industry, which occurred between July 1 and July 28 this year.

Key Contracts and Suppliers
DRA (engineering, procurement and construction management); Kalcon (mining operations) and Minopex (process plant operations and maintenance contract).

On Budget and on Time?
At the end of the second quarter, project progress was on schedule and within plan. The impact of industrial action on South Africa’s steel industry between July 1 and July 28 is still being assessed. The optimisation is now forecast to be complete during the second quarter of 2015 and is not expected to impact on 2015 production.

Contact Details for Project Information
Lucara Diamond Corporation corporate development Sophia Shane, tel +1 604 689 7842 or fax +1 604 689 4250.