Botswana’s government has renewed Lucara Diamond’s licence for its Karowe mine for another 25 years, the company said on Tuesday.
In a statement, Lucara Chief Executive Officer, Eira Thomas said the renewal, effective from Monday, would secure the diamond producer’s mining rights to 2046 and marked a critical step in the formal sanction of the Karowe underground expansion project.
“The receipt of our mining licence renewal … (paves) the way for the completion of a supplemental debt financing and full project sanction later this year,” she added.
“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 the Covid-19 pandemic, focused on time critical-path items, detailed engineering and design, and limited earthworks and geotechnical studies. Thomas said the company was exploring debt financing options for the underground expansion for those amounts expected to exceed Lucara’s cash flow from operations during the construction period. It anticipated financing to be in place by the second half of this year, she added. The underground expansion programme has an estimated capital cost of $514 million and a five-year period of development, with first ore anticipated from underground in 2026.
Lucara is a leading independent producer of large Type IIa diamonds from the Karowe mine, which it owns 100%. In November, it said it had recovered an unbroken 998 carat high white clivage diamond from the mine, following a notable series of diamond recoveries during a recent production run weighing 273, 105, 83, 73 and 69 carats.