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 between 2.3-million and 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 allow for sustainable processing of hard ore in the south lobe.

The project has a mine life of 13 years.

Net Present Value/Internal Rate of Return
The net present value of the project, at a discounted rate of 8%, is $448.1-million.

Value
The final capital expenditure for the development of the Karowe mine was 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 Diamonds finalising the optimisation of the newly integrated circuit as part of the Karowe diamond mine’s plant optimisation project.

Karowe’s optimised circuit, valued at about $55-million, has been run at design capacity using different types of ore from the pit.

“Testing the systems while processing the most difficult types of ore is in progress, with adjustments being made to the plant to accommodate these difficult ore characteristics,” says Lucara president and CEO William Lamb.

The particularities of the feed material include high levels of high-density material, which causes complications in the dense-medium separation (DMS) plant and subsequent downstream recovery processes.

Lamb has further highlighted that implementing the X-ray transmission (XRT) technology machines, as part of the plant optimisation, has significantly improved the early recovery of large high-value diamonds.

All material between 8 mm and 60 mm is subjected to the XRT technology, which identifies carbon, the main component of a diamond, as opposed to previous technology, which identified the impurities within diamond. This improved the upfront recovery of large diamonds and limited diamond damage, Mining Weekly reported last month.

“Since the machines were included as part of the full circuit, no less than five diamonds larger than 100 ct have been recovered by these machines, including three diamonds larger than 200 ct,” Lamb says.

He further stresses that, to replace a coarse DMS circuit or have a smaller DMS plant that does not require any further recovery processing (requirements through the introduction of the XRT technology is “a significant game changer”.

This, linked with significantly higher throughputs, leads to smaller plants, lower capital outlay and diamond recovery closer to the front end of the plant before they can potentially be damaged Lamb has emphasised.

In addition to the XRT machines, Lucara has included two stages of magnetic separation in the recovery plant to remove magnetic material before it reaches the X-ray machines. While Lamb acknowledges that this technology is not new, he highlights the significant mass reduction effect that the stages have on the feed to downstream recovery processes.

“The upgrade is being completed to maintain the current throughput and production profile,” Lamb reiterates, reaffirming that sales from Karowe are still forecast at between 400 000 ct and 420 000 ct for this year, at an operating cost of $33/t to $36/t of diamonds processed.

Meanwhile, Lucara is also focusing on its two exploration licences in the Orapa/Letlhakana kimberlite district, in Botswana, with initial exploration still scheduled for this year.

Lamb has noted that a bulk sample plant, located within the current Karowe mine lease area, is scheduled for final commissioning by the end of August.

Construction started on the bulk sample plant in April, with most of the early construction being civil works. As the plant is modular, all modules, including the front end, the DMS, degritting and recovery, were preassembled off site to ensure that everything fits.

“All modules, including the recovery, are now on site and construction is going well,” Lamb has said, pointing out that, as the plant is located within the Karowe mine lease area, access to water and power is ensured, and the need for generators eliminated.

When the processing of exploration samples is complete, the plant can also be used to do grade reconciliation and additional work on the Karowe asset, if required, he adds.

“Lucara is awaiting permits from government to enable us to extract the 5 000 t samples from the kimberlite blocks BK2, AK11 and AK12,” he further notes.

Meanwhile, based on historical work, the three targeted kimberlites – BK2, AK11 and AK12 – have been identified as being diamondiferous, Lamb says, but notes that Lucara aims to understand the value of the diamonds before spending a significant amount of money on the development of a grade model using large-diameter drilling.

Therefore, Lucara plans to extract and process 5 000 t of kimberlite from each of the three orebodies. “This will give us an indication of grade, but more importantly . . . the quality of the diamonds – a step that would historically only have happened at the end of the exploration timeline,” he says.

Lamb believes that exploration could result in two possibilities – “the first prize of a standalone orebody that can support a separate process facility [or] the second prize of a resource with economics that will support the mining, transport and processing of diamonds through Lucara’s existing facility”.

“There definitely still is potential for economic kimberlite discoveries in Southern Africa. The resources might not be as large, but the model we have implemented proves the economic extraction of value from smaller assets,” Lamb concludes.

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?
The plant optimisation project has progressed and is expected to be completed in the second quarter of 2015 within budget.

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