Name of the Project
Karowe underground feasibility study.

Location
Botswana.

Client
Lucara Diamond Corporation/Lucara Botswana.

Project Description
The results of a preliminary economic assessment (PEA) have demonstrated the potential economic viability for the development of an underground mine at Karowe once the openpit mine is completed.

The Karowe underground project targets the South Lobe kimberlite resource below the current planned bottom of the openpit.

The Karowe mine AK06 mineral resource comprises 57.85-million tonnes grading 13.7 carats per hundred tonnes (cpht) in the indicated category and 5.84-million tonnes in the inferred category grading 20 cpht, following a mineral resource update in 2018.

The bulk underground mining method selected to mine the AK06 kimberlite resource will ultimately be decided during the ongoing feasibility study, due for completion in the second half of 2019.

Mining methods under consideration include block caving, sublevel retreat, or sublevel caving. 

The aim is to extend the mine life from 2026 to at least 2036.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
At the PEA level the stand alone underground project has a base case post-tax net present value, at a 5% discount rate, of $451-million and an internal rate of return of 38.9%, with a pretax payback of 2.5 years. These financial models will be updated with the feasibility study.

Value
Based on the PEA financial model for a stand alone UG mine, the preproduction capital costs, including a 25% contingency, the costs of the prefeasibility and feasibility studies, as well as hydrogeology and geotechnical testing and modelling costs, have been estimated at $195-million. The financial model will be updated with the completion of the feasibility study.

Duration
Not stated.

Latest Developments
A budget of $14.8-million has been approved to complete a feasibility study on the project, which was initiated in 2018, evaluating the potential for an underground mining operation at Karowe.

Efforts this year will focus on follow up geotechnical and hydrogeological drilling and related studies. Exploration expenditures are estimated to be up to $3-million for use of the Sunbird remote mapping technology, drilling of prospective targets identified by the technology and work on Lucara Botswana Prospecting licence.

Key Contracts and Suppliers
JDS Energy and Mining (feasibility study lead).

No contracts have been awarded as yet.

On Budget and on Time?
The project is on schedule and within budget.

Contact Details for Project Information
Lucara Diamonds communication & IR Christine Warner, email Christine.warner@lucaradiamond.com.