THE future of one of the world’s richest diamond mines has finally been secured three years after its botched expansion threatened to bankrupt owner Lucara Diamond Corp.
The Toronto-listed miner said on Friday it had sold $350m in bonds in a private placement which will enable it to refinance $220m in long-standing debt, and fund the balance of the $779m Karowe underground extension project in Botswana.
Karowe has yielded some of the world’s largest ever diamonds including the 1,758 carat Sewelô diamond in 2019, a 1,174 carat diamond (2021), and the 1,109 carat Lesedi La Rona (2015). The extension project foundered in 2023 after delays caused by unexpected geological conditions resulted in the resignation of then CEO Eira Thomas. Then followed a period of uncertainty as project capital ballooned from its original $512m.
Said William Lamb, President and CEO of Lucara: “The bond issue attracted strong interest from a broad range of international investors reflecting continued confidence in the exceptional quality of the Karowe mine and its long-term value potential”.
“With the project now fully financed, we can focus all our efforts on executing the remaining development work and advancing Karowe toward a new phase of sustainable, high-value diamond production,” he said.
In January, Lucara sold shares for a total sum of C$165m which was supported by Lucara’s 31% shareholder, the Lundin family.
Some $469.4m has been spent to date on the project which will extend Karowe to a depth of 767 metres and keep the mine operating until 2040. First production from the underground section is expected in the first half of 2028. As the open pit is exhausted, production in the meantime will be supported from low-grade stockpiled material.
A study for the further extension of the mine will start in 2027, said Lucara in a presentation in January.
Shares in the company are about 31% higher year-to-date but 23% lower over the last 12 months amid a severely depressed diamond market.
Despite this, it’s hard to overstate the value of gems recovered from the mine. Since 2013, 395 diamonds in excess of 100 carats have been recovered at Karowe. This is estimated to be greater than 40% of global production since operations began in 2012, the company said in its presentation.
