Lucara Diamond has approved a budget of up to $53 million for early works related to a proposed underground mine at its wholly-owned Karowe diamond mine, in Botswana.
It said an investment decision, subject to receipt of all required authorisations and the arrangement of financing, is expected in the second half of 2020.
“Anticipated cash flow from operations in 2020 should allow us to pursue early works which are critical to the underground development schedule, while at the same time allowing us to leverage our balance sheet to finance the project in a cost-effective manner," said Lucara chief executive Eira Thomas.
The company forecasts revenues of between $180 million and $210 million in 2020, as the proportion of carats recovered from the higher grade MP/KS and EM/PK(S) units increases.
Lucara recently concluded a feasibility study for the underground expansion at Karowe, which is expected to double the mine life, and generate significant revenue and cashflow out to 2040.
Pre-production capital cost of the underground project was set at $514 million.
Karowe has produced 2.5 million carats since 2012 and generated $1.5 billion in revenue.