Lucara’s Underground Expansion Gathers Steam

  • Expansion to extend life of Karowe Mine to 2040 
  • Spent over P350m on Expansion Project in Q2 
  • Will spend approximately P1.3 billion in 2022


During the three months that ended June 30, 2022, Lucara Diamond Corporation spent $29.1 million (approximately P361 million) on the underground expansion (UGP) of its 100 percent owned Karowe Diamond Mine in Botswana, The Botswana Gazette has established.

In its 2022 second quarter (Q2) results released recently, Lucara says the money was used primarily in relation to ongoing construction activities and procurement of long lead items.

$4bn additional revenues
The Karowe UGP is expected to extend the mine life to at least 2040, with underground carat production predominantly from the highest value EM/PK(S) unit and is forecast to contribute approximately $4 billion in additional revenues, using conservative diamond prices.

The Canadian mining outfit says in the estimated capital cost for the Karowe UGP has increased from $534 million (including contingency) to $547 million to reflect expected pricing changes following execution of the main sink contract.

“Mine ramp-up is expected in Q1 2026 with full production from the Karowe UGP expected in H2 2026,” says the report. “We are using a combination of cash flow from operations and project debt for the investment in the Karowe UGP, which is fully financed.”

Lucara says capital costs for the underground expansion are expected to be up to $110 million (about P1.3 billion) in 2022 and will focus on commencement of main shaft sinking activities, commissioning of a bulk power supply 132 kV line and substations and detailed engineering for the underground development.

“Sustaining capital and project expenditures are expected to be up to $17 million with a focus on completion of a community sports facility, dewatering activities and an expansion of the tailings storage facility,” the report says.

HB Trading BV
Revenues from the sale of 66,167 carats recovered from Karowe Mine were $50.0 million (Q2 2021: $45.9 million from the sale of 68,806 carats from Karowe). “The sales agreement with HB Trading BV (HB) accounted for 65 percent (Q2 2021: 67 percent) of total Karowe revenue recognised in the quarter,” says the company.

“Operating cash costs of $28.78 per tonne processed (Q2 2021: $27.51 per tonne processed) reflect the impact of higher input costs, partially offset by a comparatively stronger US Dollar. Adjusted EBITDA of $24.4 million increased by 10 percent from $22.2 million for the same period in 2021, attributed primarily to higher revenues.”