Modern Mining November 2017

DIAMONDS

PEA confirms viability of an underground mine at Karowe The Karowe mine in the Orapa Diamond Field of Botswana. On present plans, open-pit operations will continue until 2026 (photo: Lucara).

Underground operations are focused on the high value south lobe, which remains open at depth below the current design, and is a fur- ther indication of the potential longevity of the resource and cashflow generation at Karowe,” comments William Lamb, President and CEO of Lucara. “We have seen on-going improvement in the value of diamonds from the south lobe and the development of an underground mine has the potential to add significantly to the Life of Mine at Karowe.” The Karowe Underground PEA presents a standalone scenario which does not incor- porate the economics of the current Karowe operations except where taxes are affected based on capital expenditures. The PEA evalu- ates the development of a Sub-Level Caving (SLC) operation to extract the AK06 kimberlite resource, with all kimberlite being processed at the existing Karowe processing plant over a 10-year period following the cessation of the current open-pit operations. The PEA assumes that the Karowe Under­ ground will seamlessly integrate into current operations with kimberlite sourced from underground being stockpiled in the later years of the opencast operations to ensure suf- ficient availability to the processing facilities

Lucara Diamond Corp’s Karowe mine in Botswana – famous for the number of large-carat stones it produces – could transition into an underground operation once open-pit mining ends in 2026. A recently completed Preliminary Economic Assessment (PEA) confirms the viability of an underground mine at the site and Lucara is now following up with a Pre-Feasibility Study (PFS), whose results should be released in Q2, 2018.

H ighlights of the NI 43-101 com- pliant PEA include an after-tax undiscounted net cash flow of US$820 million, an after-tax NPV 5% of US$451 million and an IRR of 38,9 %. The total Life-of-Mine (LOM) production is estimated at 2,72 million carats. Average LOMoperation costs are put at US$49,4 per tonne. Pre-production capital costs (includ- ing a 25 % contingency, the costs of a pre-fea- sibility and feasibility study and hydrogeology and geotechnical testing and modelling costs) are estimated at US$195 million. “The results of the PEA demonstrate the potential economic viability for the devel- opment of an underground mine at Karowe.

26  MODERN MINING  November 2017