Canada's Lucara Diamond (TSX:LUC) has secured up to US$220 million in credit-approved commitments for senior debt facilities, which will help it fund a five-year, US$514 million underground expansion of its Karowe mine in Botswana.
The package consists of a project finance facility of US$170 million for the expansion and a working capital facility of US$50 million to bankroll the ongoing operation of the open pit mine.
Chief executive Eira Thomas said the backing of five major banks, including ING Bank, Natixis, Soci?(C)t?(C) G?(C)n?(C)rale London Branch, Africa Finance Corporation and Afreximbank, represented a strong endorsement to the company's growth plans.
Moving Karowe underground is expected to take five years and extend its productive life by 20 years - until 2040 - with first production expected in 2026.
The move will allow Lucara to exploit the highest value part of the orebody first and generate over US$5.25 billion in gross revenue.
The Vancouver-based miner said it intended to fund the remainder of the expansion costs by cash flow.
Karowe is one of the world's most prolific sources of large, high value type IIA diamonds, producing an average of 300,000 high-value carats each year.
It began commercial operations in 2012 and has already become the only mine in recorded history to have yielded two 1,000+ carat diamonds - the 1,758 carat Sewel?? in 2019 and the 1,109 carat Lesedi La Rona in 2015, which sold for US$53 million.