- Project expected to extend mine life to 2024
- 245,764 carats sold from Karowe in the nine months to Sept 2022
Canadian diamond mining company Lucara says it invested $23.9 million in the three months ended September 2022 for the underground expansion of its 100 percent owned state-of-the-art Karowe diamond mine.
In a recently issued statement, the company says the project investment in the third quarter of 2022 focused on the transition to main sink activities for both two shafts, procurement of underground mobile equipment and construction of an upgraded transmission line and related substations.
The funds were spent on the main sinking of the production shaft, which commenced at the end of September, while the main sinking in the ventilation shaft continued alongside procurement of shaft station underground mobile equipment progressing with equipment deliveries expected to commence in quarter four 2022 and quarter one of 2023.
In addition, Lucara continued the Letlhakane and Karowe substation construction with focus on civil work and cable pulling for control equipment installation with the transmission line towers equipped with stringing hardware and safety nets installed over existing line crossings
Lucara says it expects the Karowe underground project to extend the mine to at least 2040, with initial underground carat production predominantly from the highest value Eastern magmatic/pyroclastic kimberlite (EM/PK(S) unit and forecast it to contribute approximately $4 billion in additional revenues, using conservative diamond prices. “The updated estimated capital cost for the Karowe underground project is $547 million (including contingency) and reflects expected pricing changes following execution of the main sink contract in Quarter 2 of 2022,” says the statement.
“Mine ramp-up is expected in 2026 with full production from the Karowe underground project expected in the second half of 2026. The company is using a combination of cash flow from operations and project debt for the investment in the Karowe underground project, which is fully financed.” The planned activities for the project in the fourth quarter of 2022 include sinking within both the ventilation and production shafts and procurement of underground equipment, including awarding the bulk air cooler tender.
There will also be continuation of detailed design and engineering of the underground mine infrastructure and layout in the coming quarter, as well as commissioning the 29-kilometres 132 kilovolt (kV) bulk power supply powerline. Meanwhile, in the nine months ended 30 September 2022, a total of 245,764 carats were sold from Karowe at an average price of $528 per carat, generating revenue of $129.9 million before top-up payments of $33.8 million.
Lucara reported a strong operational performance in the third quarter with revenue for the three and nine months ended 30 September 2022 totalling $49.9 million and $170.5 million respectively. The company is a leading independent producer of large exceptional quality Type IIa diamonds from Karowe, which has been in production since 2012 and is the focus of the company’s operations and development activities.