Botswana approves license renewal for Lucara’s Karowe Mine

Botswana’s Minister of Mineral Resources, Green Technology, and Energy Security has approved the application for renewal of Mining License No 2008/6L for the Canadian-owned Lucara Diamond Corp, and its subsidiary, Lucara Botswana, for the AK06 (Karowe) Mine.

In a statement, Lucara Diamond Crop says that the renewal is effective January 4 for a period of 25 years and marks a critical step in the formal sanction of the Karowe underground expansion project.

"The receipt of our mining licence renewal and extension to 2046 is an important milestone for the Karowe underground expansion project, paving the way for the completion of a supplemental debt financing and full project sanction later this year,” said Eira Thomas, President and CEO. 

“Lucara is grateful for the confidence and support demonstrated by the Government of Botswana as we work to expand our operations at Karowe underground, for the benefit of the Government and the people of Botswana together with Lucara's shareholders. We look forward to continued cooperation and a mutually rewarding partnership with the Government of Botswana." 

The Karowe underground expansion project, which continued to advance in 2020 under a revised US$22 million budget in response to COVID-19, is focused on detailed engineering and design, and limited earth works and geotechnical studies. 

The company continues to explore debt financing options for the underground expansion for those amounts which are expected to exceed the Company's cash flow from operations during the construction period. 

In its statement, Lucara anticipates that financing will be in place by the second half of this year. The underground expansion program has an estimated capital cost of $514 million and a five-year period of development, with first ore anticipated from underground in 2026.

The hard rock, open pit mine has a depth of 324 metres has a probable reserve from surface to bottom of 19.84mt containing 2.6 million carats, total mineral reserves (including stockpiles) of 25.40mt containing 2.96 million carats, based on 1.25mm bottom cut off size and 70 percent of the insitu carats at 1.00 BCOS)

A total Indicated resource from surface to a depth of 600 m below surface of 57mt containing 7.9 million carats including stockpiles (effective date of May 25, 2018, based on 1.25mm bottom cut off size and 70% of the insitu carats at 1.00 BCOS). It has an inferred resource from 600 metres to 750 metres below surface of 1.93 mt containing 1.17 million carats.