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Lucara progresses with Karowe expansion as diamond market recovery continues

11th August 2021

By: Marleny Arnoldi

Deputy Editor Online

     

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TSX-listed Lucara Diamond Corporation says the diamond market continues on its recovery path, as evidenced by the company generating revenue of $46.3-million for the quarter ended June 30.

The company realised an average price per carat sold of $671 for the quarter.

Notable diamond recoveries in the quarter include four pink diamonds from direct milling, including a 62.7 ct high-quality fancy pink Type IIa gem diamond and a 22.21 ct pink gem of similar quality.

Lucara also recovered its third diamond weighing more than 1 000 ct – a 1 174.76 ct diamond – from the Karowe mine, in Botswana, since 2015.

The second quarter marked a record in terms of the recovery of special diamonds – those weighing more than 10.8 ct. This included 21 diamonds greater than 100 ct and three diamonds greater than 300 ct.

The company has also reported positive results from its Clara diamond selling platform, which increased sales by 38% quarter-on-quarter, with transaction values of $8.3-million over six sales in the second quarter. The number of buyers on the platform totalled 84 as of the end of June.

Meanwhile, the company remains on track with the expansion plan at Karowe to extend the mine life to at least 2040, after securing $220-million of senior debt on July 12 and a recently closed equity financing of C$41-million.

Lucara in July successfully completed debt and equity financing for the mine’s underground expansion project, which focuses on mining from the highest-value EM/PK(S) unit of the South Lobe.

The underground project is expected to contribute about $4-billion in additional revenue, starting in 2026.

Total capital expenditure for the expansion is estimated at $534-million, while the total spend planned for this year is $120-million.

Lucara has mobilised shaft sinking teams on site, with pre-sinking activities scheduled to start in the third quarter. Mine shaft civil works are already under way at the shaft collar boxcuts, hoist houses and hoist foundations.

Moreover, 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.

Lucara CEO Eira Thomas says Lucara has made tremendous progress on the Karowe underground expansion project over the last 18 months, despite the challenges imposed by the global pandemic.

She adds that the project comes at a time when the outlook for the diamond market is stronger than it has been for years, representing an exciting growth opportunity for shareholders and stakeholders in Botswana.

 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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