Owners of Karowe Mine, Lucara Diamond Corp, have recently told its stakeholders that it has secured US$220 million for the underground expansion of the mine.
The credit has been approved by a syndicate of five Mandated Lead Arrangers (MLAs) to fund the expansion.
According to Lucara President and Chief Executive Officer, (CEO) Eira Thomas, the funding will be divided into two tranches; a project finance facility of US$170 million to fund the development of the underground project, and a working capital facility of US$50 million to support the on-going operation of the Karowe open-pit mine.
“Securing credit commitments for the arrangement of +$200 million senior debt facilities from five leading international financial institutions, with significant mining and metals track records and experience in Africa, is an important achievement for Lucara and a strong endorsement of our underground expansion plans,” said Thomas.
She noted this debt package will supplement cash flows from continued operations of the open pit over the next 5 years, extending Karowe’s mine-life out from 2025 until at least 2040.
Meanwhile, the company has announced that it has bounced back in the first quarter of 2021, achieving revenue 56 percent higher than the same corresponding period last year.
In the first quarter of 2021, Lucara’s revenue amounted to US$53.1 million.
Thomas noted Lucara’s solid performance in the first quarter reflects a stronger business environment, continued focus on operational discipline, and its innovative approach to sales.
“We also made significant progress towards the completion of a supplemental debt financing package with credit approved commitments received from five international lenders, in support of our plans for underground expansion,” she said.
During the first quarter of the year, the diamond market is said to have remained buoyant following a strong holiday sales period, particularly in China and the United States.
Careful rough diamond supply management by the producers is also said to have helped to re-balance polished diamond inventories and stabilize the market overall.