Lucara Extends Finance Facility for Karowe Expansion
December 31, 23
(IDEX Online) - Canadian miner Lucara has announced the latest in a series of extensions to the finance facility that is funding the underground expansion of its Karowe diamond mine, in Botswana.
In July it said it expected the cost of the project to increase by 25 per cent from $547m, the original estimate, to $683m. Underground production is now expected to start in the first half of 2028, rather than the second half of 2026.
Lucara said in a press release that it was announcing a "further short-term extension of the maturity of its $50m senior secured working capital facility (the "WCF") and a deferral of the requirement to place $52.9m in a cost overrun reserve account (the "CORA") to the earlier of the conclusion of discussions with its lenders or January 15, 2024 (the longstop date)."
Open pit operations, which began at the mine in 2012, are expected to end in 2026. The underground expansion should extend the life of Karowe until at least 2040 and deliver around $4bn of additional revenue.
Lucara has already announced several extensions, dating back to August. The Vancouver-based miner has a project finance facility of $170m to fund the development of an underground expansion at Karowe and the WCF which is used to support ongoing operations.
"Presently, $90m is drawn from the Project Loan and $35m is drawn from the WCF," the company said. "The terms of the WCF extension do not permit further draws from either the Project Loan or the WCF. The CORA balance is currently $18.6m.
Diamond sorting at Karowe, courtesy Lucara.