Every diamond miner hopes to find a rare diamond. Fortunately, for diamond junior Lucara Diamonds, its flagship mine Karowe keeps revealing such gems, writes Laura Cornish.

From 2012 until now has been an exceptional and transformational period for Lucara Diamonds (Lucara),  a member of the Lundin Group of Companies. It will soon celebrate its first year of production, which began with the commissioning of its Botswana-based, 100% owned Karowe mining project (AK6 kimberlite and process plant). The real celebration, however, is the recovery of some exceptionally rare and large-carat diamonds.

On 10 March, Lucara recovered a 239.2 carat diamond from Karowe. In addition to the recovery of this exceptional gem, two more large stones weighing 124 carats and 71.1 carats have also been discovered. The diamonds were recovered from the central kimberlite domain, which has only recently become ore feed to the plant as the pit expands towards the south.

The diamonds are currently being studied prior to being sold later in the year. “The recovery of these large stones is hugely significant to both Lucara and Botswana. To the best of my knowledge, the 239 carat stone is one of the largest diamonds ever to have been recovered from the highly prolific Orapa kimberlite field in over 40 years of production. The recovery of a diamond of this size and the strong operational performance in our first few quarters of operation demonstrate the quality of the asset as well as the competence of the operations team,” says Lucara’s president and CEO, William Lamb.

The recovery of such a magnificent story has already made company history, especially considering there were no large-scale stone predictions from any of the exploration samples. “It is the rare occasions such as this that remind me why I find diamond mining so exciting.”

Some would consider the 239 carat Karowe diamond a ‘cherry on the cake’. The mine, however, started revealing its true unique potential late last year. In October 2012 and November 2012, Lucara recovered two rare sky blue diamonds, weighing 9.46 carats and 4.77 carats respectively.

The larger stone was sold in November 2012, bringing in US$4.5 million (R40.36 million) – indicating just how much the market loves them, Lamb points out. “The recovery of the 4.77 carat blue diamond, which was sold in March 2013 for US$1.6 million, brings the total number of blue diamonds recovered in the past few months to four.” The impact of these rarities on Lucara’s cash flow is significant.

While the Karowe process plant, comprising dense media separation and X-ray, is still in its infancy, the retrieval of such valuable stones has already seen Lucara relook and re-evaluate its plant design. “Our plant was only ever designed to recover typical run-of-mine material. We have, however, already started a programme to evaluate what changes need to be made to the plant and how to change the process stream slightly to accommodate the possibility of recovery of bigger diamonds,” Lamb discusses.

Lucara is in the process of transferring a Russian Bourevestnic high capacity X-ray machine from its Lesotho-based Mothae project (currently on care and maintenance), which Lamb believes will already help evaluate how best to alter Karowe’s circuitry process.

The Karowe plant has been designed to process 2.5 Mtpa of kimberlite, producing 400 000 carats a year. The pipe actually consists of three separate kimberlites: a central, northern and a southern lobe. The centre lobe will be mined over the next four or five years and is showing high-grade, large white stone proportions. North lobe grades are slightly higher with the quality of the diamonds being lower by comparison, while exploratory predictions for the south lobe (70% of total kimberlite) reveals slightly “smaller” diamonds.

Lamb’s expectations for Karowe remain high in the long term. Not only is the pipe open at depth, below 758 m, but the proportion of Type IIA diamonds recovered during exploration came from the south lobe, including a population of pink and purple diamonds and smaller blue stones. “This increases the probability for recovering larger coloured stones from this area as well,” he says.

“Karowe has delivered beyond expectations in every regards and has established itself as one of Botswana’s premier diamond producers in just eight months,” Lamb exclaims. During the 2012 year, the project produced a total of 303 000 carats from 1.4 Mt of ore, exceeding guidance by 12%. Proceeds from the sale of nearly 216 000 carats totalled US$55 million, resulting in an average sales price of US$253/carat – also exceeding year-end expectations. During the first quarter of 2013, the company sold 144 712 carats of Karowe diamonds for gross proceeds of US$32.5 million. The 2013 sales included six parcels totalling 18 233 carats, which were withheld from the December 2012 sale due to low volumes of competitive bidding.

Lucara anticipates holding eight sales (two per quarter) in 2013. The sales are anticipated to average 50 000 carats of diamond each and there will be client viewings conducted in both Gaborone and Antwerp.

“Because this is Lucara’s first Greenfield mine project, we are risk-averse. We have a highly skilled staff complement of 87 people who are making the main decisions and have all been involved in the development of other diamond projects. Senior managements portfolio’s alone includes eight different diamond projects.” Contractors provide bulk of labour and include plant operator Minopex and WBHO local subsdiary Kalcon, which is responsible for mining.


Lamb likens the company’s second asset, the Lesotho-based Mothae, to the famous Letšeng pipe, also in Lesotho. Mothae Diamonds, which is owned 75% indirectly by Lucara through Mothae Diamonds Holdings and 25% by the Lesotho government, holds a 100% interest in the Mothae project.

It comprises a number of kimberlite blows and contains large Type IIA stones. A trial mining programme was completed in September 2012 with final processing of hard, unweathered kimberlite from the central resource domain of the south lobe. This brings the total tonnage sampled from the Mothae kimberlite for economic evaluation purposes to 603 819 dry tonnes, yielding an average sample grade of 3.88 cpht.

Diamonds sold from Mothae have demonstrated the potential for the kimberlite to deliver high value goods. In the first two held, the average diamond price exceeded $870/ carat with the highest value diamond sold being a 28.9 carat stone which sold for more than $57 000/carat.

The company is currently reviewing a number of development options for Mothae following the completion of its trial mining programme. “The project’s biggest hurdle is power. We need a 60 km power line to deliver between 10 and 12 MW of power to site. We are not in the position to provide the enormous capital outlay for such infrastructure requirements. The new minister of mines, however, is lobbying heavily with the minister of energy for countrywide infrastructure, which is clearly a step in the right direction and we are confident of the outcome. We are, however, investigating alternative solutions to find a viable way to take this project forward,” Lamb outlines.

Further growth

Karowe is providing us with a revenue stream enabling us to look at other opportunities to expand our portfolio. I am particularly keen on partnering with other juniors at the advanced exploration level.”

While most diamond experts have indicated that the chance of discovering a new and viable kimberlite pipe is almost non-existent, Lamb has his own theory. “Full-scale kimberlite exploration last occurred in the Orapa district at least 40 years ago and while many discoveries then were considered unviable, I believe some of those areas should be revisited. Economics have changed, indicating the possibility for projects that were once considered unfeasible to be feasible today. The AK6 kimberlite is a good example of this.”

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