Karowe mine shows strong cash discipline

Keikantse Lesemela - BG correspondent
Tuesday, 15 November 2016
Karowe mine shows strong cash discipline

Lucara Diamond has decreased operating cash costs in its Karowe mine due to high power costs and an increase in tonnes processed. In its third quarter report, Lucara Diamond indicated that Karowe’s operating cash costs guidance was being decreased for the year from between $29 to $31 per tonne of ore processed to $25 to 28 $per tonne of ore processed.

“Karowe’s operating cost is $25 per tonne compared to $29 per tonne last year. The reduction in cost guidance is due to power and general cost savings and an increase in tonnes processed. Costs remain well controlled,” stated the report. The mine has recorded 700 000 tonnes of ore and 3.1 million tonnes of waste. The report states that the process plant has performed well during the quarter with tonnes processed being 19.5 percent ahead of forecast for the quarter. The company also recorded revenue of 38 .1 million compared to 90.9 million in the same period last year.

Lucara has recorded a net loss of 3.8 million in the third quarter compared to net income of $44.2 million in the prior year. “This is due to the company having two sales in the prior year including an exceptional stone tender compared to a single sale in the current year. The company has also reported a foreign exchange loss compared to a foreign exchange gain on translation of its US dollar cash in the prior year,”

Lucara Diamond President and Chief Executive Officer, William Lamb said they are pleased with the third quarter revenue and now look forward to the fourth quarter with high quality production for their second exceptional tender of the year. “Cost discipline during the third quarter remained strong and we continued to advance our capital projects for large diamond recovery as well as our exploration and drilling programmes to expand our resource base,” said Lamb.

Lamb said the company continues to forecast between $15million to $18 million for the modifications to the existing large diamond recovery circuit and the installation of a Mega Diamond recovery circuit.In the last quarter, the company approved the a sub-middles XRT project which targets the recovery of diamonds sized between 4mm and 8 mm using XRT technology.

The 30 million Dollar project is expected to address processing of the very dense high quality or at depth and will also result in the most efficient and cost effective processing methodology for processing this ore. Lucara has two prospecting licences in Botswana  located within a distance of 15km and 30km from the Karowe Diamond Mine. The two precious stones prospecting licenses are to be known to host kimberlites, BK02, AK11 and AK12, AK13 and AK14.

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