Name of the Project
Karowe underground project.

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-2026, ending at an elevation of about 700 m above sea level.

The project is expected to extend the mine life to at least 2040, with underground carat production coming predominately from the highest-value EM/PK(S) unit.

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.

A 767-m-deep production shaft, 8.5 m in diameter, driven from surface, will be equipped with two 21 t skips for production hoisting and a service cage for man-and-material movement through the mine. This shaft will also serve as the main fresh-air intake to the mine.

A second shaft, 6 m in diameter, driven 733 m deep from surface, will form the main ventilation exhaust pathway.

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 2026.

Life-of-mine production (remaining openpit and underground) is estimated at 7.4-million carats.

The underground expansion is expected to extend Karowe’s mine life by 13 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 $750-million, with a payback of about three years, for the combined openpit and underground mine.

Capital Expenditure
Lucara announced in July 2023 that the cost of the project had increased by 25% to $683-million.

Planned Start/End Date
The project will be completed by the first half of 2028, instead of the previously anticipated date of the second half of 2026.

Latest Development
Lucara reported on July 17, 2023, that it had delayed the completion of the project by a year and a half, and increased its capital cost by $136-million to reach completion.

The management update to the Karowe underground schedule and budget follows a slower-than-planned ramp-up to expected sinking rates; it also accounts for time incurred to date, as well as anticipated future grouting programmes.

The grouting has taken longer than planned, owing to a combination of high-water volumes in the sandstone lithologies between 870 m and 752 m above sea level, combined with technical challenges associated with the transition to main sinking.

"Lucara has made tremendous progress on the Karowe underground expansion project, despite many challenges over the last year as we transitioned into the main sink phase of the underground development.

“As we transition out of the sandstones early in the fourth quarter of 2023, we look forward to meeting planned sinking rates,” CEO Eira Thomas has said.

She has also emphasised that the project remains technically and economically feasible, and that its major shareholder remains supportive of the asset.

Lundin Mining Corp chairperson Adam Lundin has stated that the Karowe expansion remains highly economic, despite the delays incurred: “As Lucara's largest shareholder, we remain fully supportive of the company".

Key Contracts, Suppliers and Consultants
UMS Botswana (presink construction contract); UMS South Africa (shaft sinking equipment procurement); UMS subsidiary METS International (shaft engineering contract); and JDS Energy & Mining (engineering, procurement and construction management) for the execution of the Karowe underground project.  

Contact Details for Project Information
Lucara Diamond Corp, investor and public relations, tel +1 604 674 0272 or email info@lucaradiamond.com.