Lucara Diamond Corp. has provided an update on the Karowe Underground Expansion project (UGP). The Karowe UGP is planned to extend the mine life to at least 2040.
This will be possible through mining predominately from the highest value EM/PK(S) unit. The project is forecasted to contribute approximately $4 billion in additional revenues, using conservative diamond prices, starting in 2026.
Eira Thomas, CEO comments:
“Lucara has made tremendous progress on the Karowe underground expansion project over the last eighteen months, despite the challenges imposed by the global pandemic. The project is fully financed, allowing us to move into high gear during the second half of the year.
“Using conservative diamond price assumptions, the project delivers strong economics projected to pay back capital in under three years and add approximately $4 billion in revenues from an extended mine life out to at least 2040.
The project also comes at a time when the outlook for the diamond market is stronger than it has been for many years representing an exciting growth opportunity for our shareholders and stakeholders in Botswana.”
Next steps on the Karowe Underground development will include the following:
- UMS mobilization to site and start of pre-sink in Q3 2021, completion of early civil works in Q4 2021, continuation of detailed design and engineering of the underground mine infrastructure and layout, commencement of bulk power supply infrastructure with substation construction scheduled to start in Q3 2021, and transmission line engineering in H2 2021.
- The start of engineering on the tailings expansion and completion of other site related infrastructure will also take place in 2021.
- JDS Energy & Mining Inc. is the Engineering Procurement Construction Manager for the execution of the Karowe UGP and is currently building up the onsite project team in conjunction with Lucara’s Owners team and working in close cooperation with the Karowe Diamond Mine operations team.
Access to the underground mine is via two vertical shafts, the production and ventilation shafts. The shafts will be concrete lined with the production shaft acting as the main air intake and the ventilation shaft as the exhaust.
Detailed design and engineering work on the production and ventilation shafts is now 90% complete, and has resulted in the following changes to the 2019 FS: i) production shaft diameter has increased from 8.0 metres to 8.5 metres, ii) ventilation shaft permanent headframe, hoists and internal conveyances have been removed, iii) parallel pre-sinking of both shafts, iv) ventilation fans and coolers to be located on surface, v) in shaft grouting of water strikes changed from grout curtain installation from surface, vi) planned development of an additional sublevel to assist in drilling of drawbells, vii) removal of 670L de-watering galleries.
The number of shaft stations and nominal elevations remains the same as the 2019 FS. The planned depth of the production shaft remains at approximately 767 metres (245masl), but final planned depth of the ventilation shaft has increased marginally to 733 metres (285masl) from 716 metres.
Increased schedule time related to shaft sinking has been a result of the following design changes: i) increased production shaft diameter, ii) time allowances for in shaft grouting during sinking operations planned at known water strike horizons, iii) holing through all shaft stations between shafts, iv) additional ground support for underground stations/level breakouts.
Pre-sink construction contract and shaft sinking equipment procurement were awarded to UMS Botswana and UMS South Africa respectively (UMS). METS International, a subsidiary of UMS, was awarded the shaft engineering contract. UMS is in the process of mobilizing crews to Karowe to initiate pre-sink works.
Pre-sinking of the two shafts will run in parallel and start with mobile cranes and then transition to Scott Derrick cranes with the final depth of pre-sink at approximately 40 metres below surface (971 masl).
With the exception of an additional sublevel (340L) to assist with drill and blast of drawbells, the design, layout and infrastructure of the underground mine all remain aligned with the 2019 FS. Detailed engineering and design of the underground infrastructure and layouts will commence in Q3 2021 and are expected to be competed in Q3 2022, with no major changes from the 2019 FS plan anticipated. Underground mine development is scheduled to commence in H2 2024 with underground production ramp up starting in 2026. Full production is scheduled for the end of 2026.
Civil works for the underground expansion progressed through detailed design, and construction activities ramped up through Q1 2021 with completion of the construction area terraces, laydown areas, shaft pad preparations, along with commencement of shaft collar box cut construction and blasting within the shaft columns in preparation of civil works.
Hoist houses, hoist foundations and shaft collars are now well advanced and on time for commencement of pre-sinking which is planned during Q3 2021. As construction and mining activities ramp up, focused attention will continue to be paid on the continuation of safe operations.
Temporary power for shaft sinking is required until such time as the upgrade bulk power supply infrastructure is commissioned in Q4 2022. A three phased ramp up of the generator capacity is planned to support the increasing power requirements related to the shaft sinking activities. A power supply and services contract for the temporary generators has been signed with Aggreko International Projects.
Mobilization has been initiated with the generator pad established. Commissioning of Phase 1 is scheduled during Q3 2021 to support the start of pre-sink activities.
During 2020, Lucara negotiated and signed a self-build agreement with the Botswana Power Corporation (BPC) for the construction of two substations and a 29 km long 132 kv Transmission line from BPC’s newly established Letlhakane substation to the Karowe mine.
The planned route follows an existing regional 400 kV line and then runs parallel to the existing 11 kV transmission line currently supplying bulk power to the Karowe mine. The new power infrastructure will provide the required power for the current open pit, processing plant and the underground mine expansion.
Commissioning of and handover to BPC is scheduled for Q4 2022. Construction of substations is scheduled to commence in Q3 2021 and power line construction in Q1 2022.