Karowe Underground Project Costs Rise to US$779 Million After Updated Study

Karowe Underground Project Costs Rise to US$779 Million After Updated Study. Lucara Diamond Corp has announced that updated cost estimates for the Karowe Underground Project (UGP) have increased to US$779 million, according to results from an updated feasibility study released in January. The project, which is designed to extend the life of the Karowe Diamond Mine beyond 2040, was previously estimated at US$683 million in 2023.

The revised figure represents a significant rise from earlier projections. When the initial feasibility study was published in 2019, capital costs were estimated at US$514 million. This was later adjusted to US$534 million following engineering refinements and COVID-19-related delays. In July 2023, the estimate rose to US$683 million, largely due to higher-than-expected water volumes in sandstone requiring additional grouting. The latest update places the cost at US$779 million.

To date, approximately US$436 million has been spent over five and a half years. Lucara said cost increases have been driven by technical challenges, including increased grouting requirements in water-bearing sandstone, as well as inflationary pressures on labour and pandemic-related delays. These delays have shifted expected first production from 2026 to the first half of 2028.

The Karowe UGP targets the high-value South Lobe of the AK6 kimberlite, which continues below the existing open pit. The project is planned to support an underground mining and processing operation of 2.85 million tonnes per annum.

Key infrastructure includes an 8.5-metre-diameter production shaft sunk to 767 metres and a 6.0-metre-diameter ventilation shaft completed to 729 metres. Ore extraction will use Long Hole Shrinkage drill-and-blast methods across planned mining levels.

Lucara said the remaining pre-production capital of US$343.2 million is expected to be funded through a mix of operating cash flow and new equity and or debt financing, with discussions ongoing with lenders and its major shareholder.