Karowe Mine revenues seen rising to P2.1bn
Staff Writer | Friday December 8, 2017 17:24
In a statement released this week, Lucara said revenue should be between $170 million and $200 million (P2.1 billion) in 2018, compared with the $165 million to $175 million (P1.8 billion) that the company expects to bring in this year.
Estimated production and sales volume for next year is seen at 270,000 to 290,000 carats versus a forecast of 260,000 to 270,000 carats in 2017. Lucara recently cut its forecast for this year as sales weakened by 20% in the nine months to September 2017 due to delays in getting the operations of its new mining contractor, Aveng Moolman, off the ground. Lucara had initially projected revenue of $200 million to $220 million from the production and sale of 290,000 to 310,000 carats this year, but last month trimmed the forecasts.
The sales forecasts for both years exclude proceeds from exceptional diamonds, such as the 1,109-carat Lesedi La Rona, which Lucara sold to Graff Diamonds for $53 million in September. “Up to 85% of the ore Lucara processes next year will come from the Botswana-located Karowe mine’s south lobe, which tends to yield better-quality and higher-value diamonds than the rest of the asset, the company projected. The producer will also continue to extract waste material to enable it to access that area in full,” Lucara chief executive officer, William Lamb said.
Lucara plans to convert the Karowe open pit mine into an underground operation when the current recourse runs out in about nine years’ time.
Pre-production capital expenditures for the underground operations are estimated to total $195 million (P2 billion), including the costs associated with the pre-feasibility and feasibility studies, the required hydro and geotechnical testing and a 25% contingency. The development period is estimated at approximately five years to first production. “The Karowe Underground benefits from the brownfields nature of the existing operations at the Karowe Mine,” added lamb.
Since declaring commercial production in July 2012, Karowe has produced an average of 320,000 carats per annum from three kimberlite lobes, from the treatment of 2.5 million tonnes per annum (mtpa). These open pit operations are scheduled to continue until 2026 with the originally planned processing of low-grade stockpiles in 2027 being moved to 2036, the end of the current planned underground operations.