Name and Location
Karowe plant optimisation project, Botswana.

Client
Boteti Mining, a wholly owned subsidiary of Lucara Diamond Corporation.

Project Description
The Karowe mine located in north-central Botswana is part of the Orapa/Letlhakane kimberlite district – one of the world’s most prolific diamond-producing areas.

The mine plan is based on probable reserves of 33.1-million tonnes containing 5.1-million carats to a depth of 324 m.

The remaining indicated resource is estimated at 48.07-million tonnes containing 7.61-million carats from surface to a depth of 400 m. Inferred mineral resources are estimated at 21-million tonnes containing 3.04-million carats from 400 m to 750 m in depth.

The process plant has been designed with a throughput rate of between 2.3-million and 2.5-million tonnes a year. Diamond recovery is estimated at 400 000 ct/y.

The Karowe plant optimisation will improve large diamond recovery, following the discovery of exceptional stones, and enable sustainable processing of hard ore in the south lobe.

The project has a mine life of 13 years.

Net Present Value/Internal Rate of Return
The net present value of the project at a discounted rate of 8% is $448.1-million.

Value
The final capital expenditure for the development of the Karowe mine came in below the original budget of $120-million.

The Karowe plant optimisation is expected to cost up to $55-million to implement.

Duration
The Karowe mine is at full production.

Lucara expects the plant optimisation project to be completed in the second quarter of 2015.

Latest Developments
Lucara reported in December 2014 that the construction and commissioning of Karowe's plant optimisation project was forecast to be completed during the second quarter of 2015 for a total cost of $55-million.

It is expected that the mine will process material largely from stockpile during the first quarter of 2015, as the plant modifications to treat the harder, higher-yield south lobe ore are planned for commissioning and completion during the second quarter.
Karowe is forecast to mine 2.5-million to 2.8-million tonnes of ore and increase waste mined during 2015, in line with the original feasibility mine plan, as it continues to open up the full extent of the south lobe. As a result, the Karowe mine plan requires more than 12-million tonnes of waste to be stripped and stockpiled or used to expand the tailings facility in 2015.

Key Contracts and Suppliers
DRA (engineering, procurement and construction management); Kalcon (mining operations) and Minopex (process plant operations and maintenance contract).

On Budget and on Time?
The plant optimisation project has progressed and is expected to be completed in the second quarter of 2015 within bidget.

Contact Details for Project Information
Lucara Diamond Corporation corporate development Sophia Shane, tel +1 604 689 7842 or fax +1 604 689 4250.