LUCARA Diamond Corporation will spend $120m this year on the underground extension of its Karowe mine in Botswana after raising project capital 4% to $534m.
Commenting on the second quarter and interim numbers on Tuesday, the company also announced the project would operate at 75% of capacity about 1.3 years later than set down in the 2019 feasibility study. This was owing to Covid-19 related delays.
During the six month period, project financing debt of $220m was finalised with a syndicate of five banks. The package includes a $170m project finance facility and a $50m working capital facility to support ongoing production at Karowe.
Lucara Diamond previously raised C$41.4m for the project after issuing shares.
Lucara Diamond ended the first half of its 2021 financial year in far better shape than in 2020, reporting net income of $9.4m for the period ended June 30.
This compares to a $17.1m loss last year amid the Covid-19 pandemic which saw production volumes fall while sales of Lucara’s large diamonds were suspended owing to poor market conditions. Lucara Diamond’s 2021 interim basic share earnings were $0.02 cents/share compared to a loss of $0.04c/share previously.
Interim revenue of $99.4m was nearly double the $41.6m in the six month period last year. Karowe is famous for yielding high-value stones.
Eira Thomas, president, and CEO of Lucara Diamond said the diamond market had recovered strongly from last year. “The key dominant retail markets for diamonds in the US and China remain buoyant, and the market continues to be supported from lower supply from producers, and a pick up in capacity in the midstream in India,” said Thomas.
Karowe sells its diamonds in three main streams. The first consists of the sale of high value stones larger than about ten carats in an exclusive agreement with HB Group, recently extended to two years.
Lucara also sells smaller stones by traditional auction with a third stream of sales conducted through its bespoke blockchain technology platform, known as ‘Clara’. The number of clients on Clara increased by four in the second quarter to 84 while discussions around the supply of third party stones were ongoing, the company said.
Lucara said there was no change to its sales forecast of 340,000 to 370,000 carats for the year generating an estimated $180m to $210m in revenue.