LUCARA Diamond Corporation has tied up project finance totalling $220m for its $514m Karowe underground extension in Botswana.
The funding package, provided by a syndicate of five banks, exceeds the $150m to $200m the company said in February it was seeking for the project.
Participating banks in the syndicate include Dutch institution ING Bank, Natixis, Société Générale, and the finance development institutions, Africa Finance Corporation and Afreximbank. Closing of the facilities is targeted to be mid-2021, with financing in place for the second half of 2021, the company said.
“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 CEO of Lucara Diamond in a statement.
“The project is underpinned by strong economics, is expected to payback in under three years and contribute more than $4bn of additional revenues using conservative diamond pricing assumptions,” Thomas said.
Support for the project comes at a time when confidence is being restored to the world diamond market following a disrupted 2020. Lucara has forecast revenue for the current year of $180m to $210m which compares to revenue of $125.3m last year.
The Karowe mine has yielded some of the world’s most spectacular diamonds. Since 2014, 19 diamonds in excess of 300 carats have been recovered, including two larger than 1,000 carats: the 1,758-carat ‘Sewelô’ in 2019, and the 1,109-carat ‘Lesedi La Rona’, recovered in 2015.