Lucara secures $220mln for Karowe underground expansion, working capital

Lucara Diamond has received credit approved commitments from a syndicate of five Mandated Lead Arrangers (MLAs) for a senior secured project financing debt package of up to $220 million to fund the underground expansion at its wholly-owned Karowe Mine in Botswana. 
The MLAs are ING Bank N.V., Natixis, Societe Generale, London Branch, Africa Finance Corporation and Afreximbank.
The dual-listed miner said the Facilities would include two tranches, a project finance facility of $170 million to fund the development of the underground project and a working capital facility of $50 million to support the ongoing operation of the Karowe open-pit mine. 
"Securing credit commitments for the arrangement of +$200 million senior debt facilities from five leading international financial institutions, with significant mining and metals track records and experience in Africa, is an important achievement for Lucara and a strong endorsement of our underground expansion plans," said Lucara chief executive Eira Thomas.
"The Karowe diamond mine remains one of the world's highest margin diamond mines and in just over eight years of production, has yielded 4 of the 10 largest diamonds in recorded history, including the 1,758 carat Sewelô, the largest diamond recovered from Botswana, and the 1,109 Lesedi La Rona which sold for $53 million."
Lucara said the debt package would supplement cash flows from continued operations of the open pit over the next five years, extending Karowe's mine life out from 2025 until at least 2040.
Meanwhile, Lucara said it extended its current working capital facility of $50 million with Rand Merchant Bank, a division of FirstRand Bank, London Branch.
The current facility is expected to be extinguished when the project financing debt package achieves financial close.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished