The board of directors of Lucara Diamond Corp. [LUC-TSX, Sweden, Botswana] has formally approved the Karowe underground expansion project (UGP), following the financial close and satisfaction of all conditions precedent pursuant to the previously announced senior secured project financing debt package of US$220-million signed July 12, 2021.
Lucara has a 100%interest in the producing diamond mine located in north-central Botswana, Africa that is noted for producing large exceptional-quality Type IIa diamonds.
The facilities include two tranches: a project finance facility of US$170-million to finance the development of the underground project; and a US$50-million working capital facility to refinance the company’s existing debt and to support continuing operations.
A utilization notice from the US$170-million project loan facility has been accepted and first financing for the Karowe underground expansion is expected to be received in mid-September. Capital costs for the UGP, totalling US$534-million), will be met with funds from a combination of the facilities, the projected cash flows from the Karowe open-pit mine during the underground construction period and the equity financings totalling CDN$41.4-million, which closed on July 15, resulting in the UGP being fully financed. A full update on the UGP was released August 10.
Zara Boldt, chief financial officer and corporate secretary, commented: “We are delighted to have completed this significant milestone following the signing of loan documentation in mid-July. We would like to thank our lenders and advisers for their efforts towards achieving financial close of the facilities.”
Construction efforts have ramped up since the documentation for the facilities was executed in mid-July. Ventilation shaft pre-sinking has commenced, with the completion of the first set of cover holes and a total of four blasts occurring to date, with continued drilling, mucking and installation of ground support on a 24-hour basis.
The ventilation shaft depth below the shaft collar is currently at approximately 17 metres. Mobilization to site of the remaining pre-sinking equipment and contractors is under way. Civil work on the remaining ventilation and production shaft infrastructure is progressing well, with mobilization of temporary generators and civil works associated with the generator pad completed.