Top financiers back Karowe’s expansion

for the second half of year. “The mandating of five leading international financial institutions, with strong mining and metals track records and significant experience in Africa, for the arrangement of +$ 200 million senior debt facilities, is a significant achievement for Lucara. “This debt package will supplement cash flows from continued operations of the Karowe open pit over the next five years, extending Karowe’s mine- life out from 2025 until at least 2040,” said Eira Thomas, President and Chief Executive Officer.

The CEO of Lucara said the project is underpinned by strong economics and is expected to payback in under three years and contribute more than $ 4 billion ( approximately P44.17 billion) of additional revenues using conservative diamond pricing assumptions. “We are targeting completion of the project financing package by mid- year, with full project sanction thereafter. The CEO said the interest of top tier financial institutions further validates Lucara’s reputation as a leading, high margin diamond producer, which has demonstrated resilience throughout the pandemic.

Karowe is currently highly levered to strengthening diamond prices and is well positioned to take advantage of the current market. “We have observed prices recovering to pre- pandemic levels in early 2021. The execution of the mandate is a key milestone in the project financing process for the Karowe underground expansion, which has an estimated capital cost of US$ 514 million ( approximately P5, 6 billion) and a five- year development period,” said Thomas. Meanwhile, the balance of development capital is expected to come from operating cash flow generated by open pit operations at Karowe during the development period.