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Karowe expects P2 billion in 2018 revenues

Lucara Diamond Corp. forecasts that its fully owned Karowe Mine in the Boteti sub-district will produce up to 290,000 carats this year, earning US$200 million (about P2 billion), BusinessWeek has learnt.

The projections are contained in the Canadian firm’s latest financials released to the market on Wednesday morning.

In 2017, Lucara earned US$220.8 million (P2.1 billion) from the sale of 260,526 carats.

The sales included the world famous 1,109 Lesedi la Rona which on its own fetched US$53 million (P504.4 million).

The 2017 numbers and 2018 forecast continue marginally weaker production and revenues at Karowe, which in 2014 cashed in US$265 million from the sale of 412,136 carats.

The Boteti mine is due to run out in 2026, although Lucara plans an underground mine before then.

Lucara officials said Karowe’s 2018 margins would be squeezed by higher operating costs associated with further mining a new rich ore body known as the south lobe.

In 2017, the south lobe produced 521 diamonds larger than 10.8 carats or 5.6% weight percentage of total recovered carats during the year.

Karowe thus expects operating cash costs of up to US$42 per tonne in 2018, compared to US$34.6 per tonne in 2017 and US$26.5 per tonne in 2016.

“To fully gain access to the cut 2

south lobe ore requires a large volume of waste to be mined which significantly impacts operating cash costs in 2018 similar to 2017,” officials said.

Other costs of approximately US$46 million (P438 million) will be incurred in 2018 on finalisation of a processing facility, completion of the pre-feasibility study for the underground mine and advance exploration work on Lucara’s other prospecting licences.

Commenting on the company’s 2017 performance, chief executive officer William Lamb said strong prices had been received for Karowe’s stones through the year.

“Our capital projects for enhanced diamond recovery were completed on time and within budget and will ensure maximum value is recovered at the mine. These systems are operating well and above expectation.

“We are advancing our resource expansion work with the underground study at Karowe, with a pre-feasibility study to be completed during the second half of 2018,” he said.

Karowe is presently the only operating diamond mine in Botswana outside the Debswana stable of mines. The others; Ghaghoo, Lerala and BK 11 are all under care and maintenance.




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