14 Jan 2014

Lucara Diamonds, the Botswana Stock Exchange-listed company, says it expects revenue of US$150 to US $160 million from the sale of 400 000 to 420 000 carats this year, including the assumption that the company will have two exceptional stone tenders.

In a statement to the shareholders, the operators of Karowe diamond mine said they expected operating costs to be between US$31 to US$33 per tonne treated. Processing costs were forecast to be marginally higher following the change to the process plant facilities to improve large diamond recovery and process harder material from the south lobe.

The company expected to mine three to 3.5 million tonnes of kimberlite of which it is anticipated that 2.2 to 2.4 million tonnes will be processed through the plant with the remainder being stock piled. Waste mining is scheduled to be approximately 10 to 11 million tonnes.

The Vancouver, Canada -based company says it will spend US$45 to US$50 million in the building and commissioning of a plant upgrade at Karowe to improve large diamond recovery following continued occurrence of exceptional stones and to enable sustainable processing of harder ore in the south lobe.

William Lamb, the company’s president and chief executive officer said they achieved their production and operating cost targets last year and also exceeded forecast revenues following the recovery of a high proportion of large exceptional quality diamonds during the year.

Talking about the plant upgrade which is largely funded from the company’s last year end cash balance, Mr Lamb said it will be completed and brought online to deliver sustainable diamond recovery for production of 2.5 million tonnes per annum for the remainder of the mine life. He said the upgrade will also include processes to ensure the safe recovery of the value driving large and exceptional diamonds of Karowe.

“The company is focused on building on its strong financial position through operational optimization and focused cost management,” he said.

Karowe mine had been in operation since May 2012 and as of December 2013, some 5.5 million tonnes of waste had been removed to allow for the extraction of 3.9 million tonnes of ore, 2.4 million of which were processed yielding 441 000 carats. The company stated that it expects weathered ore to be depleted during the year leading to competent, primary kimberlite ore. ENDS