Banks Sign Up to Fund Lucara's Karowe Expansion

RAPAPORT... Lucara Diamond Corp. has secured financing of up to $220 million to fund a planned underground expansion at its Karowe mine in Botswana.The deal will supplement revenues from the open-pit site over the next five years and help extend the life of the mine to at least 2040 from 2025 currently, the Canada-based company said Wednesday. The expansion is likely to last for five years and will cost an estimated $514 million. The remaining funding is expected to come from operating income at Karowe during the development period. "The project is underpinned by strong economics, is expected to pay back in under three years, and [will] contribute more than $4 billion of additional revenues using conservative diamond-pricing assumptions," said Lucara CEO Eira Thomas. "Karowe is highly levered to strengthening diamond prices and is well positioned to take advantage of the current market, as we have observed prices recovering to pre-pandemic levels in early 2021."Lucara has named a syndicate of five international financial institutions - ING Bank, Natixis, Soci?(C)t?(C) G?(C)n?(C)rale, Africa Finance Corporation and Afreximbank - as lead arrangers for the financing.The credit facilities are expected to close by mid-2021, with funding available during the second half of this year."The interest of top-tier financial institutions further validates Lucara's reputation as a leading, high-margin diamond producer, which has demonstrated resilience throughout the pandemic," Thomas added.Image: The Karowe mine in Botswana. (Lucara Diamond Corp.)