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-2026, ending at an elevation of about 700 m above sea level.
The project has total indicated mineral resources estimated at 49.96-million tonnes at 15.4 carats per hundred tonnes (cpht) for a contained diamond resource of 7.67-million carats effective from December 25, 2020. Inferred resources are estimated at 5.43-million tonnes grading 18.6 cpht for a contained diamond resource of 1.01-million carats.
The feasibility of 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:
- a 767-m-deep production shaft, 8.5 m in diameter, driven from surface, which 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
Total capital expenditures, including contingency, have increased marginally by about 4%, from $513.7-million to $534-million, owing to the increase in the production shaft diameter and additional mine development. About $51.4-million has been spent to date out of the total budget, primarily on engineering and procurement of long-lead items. Total planned spend for 2021 is up to $120-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 2025, with a ramp-up to 2.7-million tonnes a year to the processing plant by the end of 2026.
Latest Developments
Lucara has made tremendous progress on the Karowe underground expansion project over the past 18 months, despite the challenges imposed by the global Covid-19 pandemic.
The project remains on track with the expansion plan at the mine, after securing $220-million of senior debt on July 12 and a recently closed equity financing of C$41-million, as well as the projected cash flows from the Karowe openpit mine, during the underground construction period.
All the necessary permits, including a mining licence extension until 2046, have been obtained to support all construction and production activities.
Lucara has mobilised shaft sinking teams on site, with presinking activities scheduled to start in the third quarter of 2021. Mine shaft civil works are under way at the shaft collar boxcuts, hoist houses and hoist foundations.
Further, openpit mining operations have been adjusted to limit the risk of production shortfalls during the ramp-up of the underground mine operations starting in the first half of 2026.
In addition, the company has signed a self-build agreement with the Botswana Power Corporation for the construction of two substations and a 29-km-long 132 kV transmission line upgrade. Substation contracts have been awarded.
The next steps on the underground development will include UMS’s mobilisation to site and the start of the presink in the third quarter of 2021; completion of early civil works in the fourth quarter of 2021; continuation of detailed design and engineering of the underground mine infrastructure and layout, the start of bulk power supply infrastructure, with substation construction scheduled to start in the third quarter of 2021; and transmission line engineering in the second half of 2021.
The start of engineering on the tailings expansion and completion of other site related infrastructure will also take place in 2021. JDS Energy & Mining is establishing the on-site project team in conjunction with Lucara's owner’s team and working in close cooperation with the Karowe diamond mine operations team.
Key Contracts, Suppliers and Consultants
UMS Botswana (presink construction contract); UMS South Africa (shaft sinking equipment procurement); METS International, a subsidiary of UMS (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.