Mali frees Resolute executives after $160 million deal, AFP reports
The three executives, including CEO Terry Holohan, were freed from detention on Wednesday.
Canada’s Lucara Diamond (TSX:LUC) has given the green light to a planned underground expansion of its Karowe mine in Botswana, which is expected to extend the operation’s life for 20 years — until 2040.
The Vancouver-based miner said the project, for which pre-production costs have been pegged at $514 million, will be largely financed from cash resources with external funding described by Lucara’s chief financial officer, Zara Boldt, as “modest.”
While the company’s investment is expected to be paid back in under three years, it has moved to preserving cash by suspending dividends for future quarters.
While the needed investment is expected to be paid back in under three years, Lucara has suspended dividends.
Moving Karowe underground, however, will allow Lucara to exploit the highest value part of the orebody first and generate over $5.25 billion in gross revenue, president and chief executive officer, Eira Thomas, noted.
She also said that margins remained healthy as Lucara’s conservative diamond pricing models reflected the current “difficult” market conditions.
“Lucara’s short-term view is that the market is now stabilizing,” said Thomas. “Longer term, the fundamentals are expected to strengthen in line with supply shortfalls from mature, depleting mines in Australia and Canada. It is important to note that a return to diamond prices observed in 2015 would nearly double the net present value (5%) of this project to $1.4 billion.”
Construction is expected to start by mid-2020 with the first diamond-bearing underground ore due for milling in 2023. Karowe is one of the world’s most prolific sources of large, high value type IIA diamonds. Since beginning commercial operations in 2012, it has produced 2.5 million carats, becoming the only mine in recorded history to have produced two 1,000+ carat diamonds.
