The year 2018 marked a period of significant milestones and strategic advancements for Lucara Diamond Corp. (Lucara), one of Botswana’s leading diamond producers. This era was characterized by bold vision, operational excellence, and a commitment to technological innovation, firmly positioning Lucara at the forefront of the global diamond industry.
Lucara Diamond Corp: Pioneering the Future of Diamond Mining with Innovation and Strategic Leadership
Under the dynamic leadership of Eira Thomas, a seasoned veteran of the diamond industry who assumed the role of CEO in February 2018, Lucara embarked on an ambitious journey. Her immediate focus extended beyond the company’s established profitability, driving efforts to assess the feasibility of extending the Karowe mine’s life through underground development. Thomas’s tenure, however, has encompassed a much broader impact, injecting a new level of operational stability, championing digital transformation, and fostering a strong, gender-diverse leadership culture within the organization, as highlighted by industry analyst Laura Cornish.
Eira Thomas: A Visionary Leader Steering Lucara’s Growth Trajectory
Eira Thomas stepped into the CEO position of an already successful diamond company, fortunate to inherit a track record of discovering numerous ultra-large, high-value diamonds throughout its operational history. Yet, her extensive background and proven credentials within the mining sector uniquely qualified her to propel Lucara into an unprecedented new era of growth and innovation. Since her appointment in the early months of 2018, Thomas has consistently demonstrated her capability to elevate Lucara to new strategic heights, a trajectory that is now visibly unfolding.
A cornerstone of her leadership has been the unwavering commitment to ensuring operational stability. This commitment was particularly evident during the critical transition to a new mining contractor, a process initiated in July 2018 and successfully completed by January 1, 2019. Despite the inherent complexities of such a change, the company not only maintained but significantly improved its operational rhythm. This strategic maneuver led to an upward revision of forecast production and waste volumes for the entire 2018 financial year, underscoring the effectiveness of the transition and the resilience of Lucara’s operations.
Stabilizing Operations and Boosting Production at Karowe
The Karowe operation, situated in Botswana, was initially designed to process approximately 2.6 million tonnes per annum (Mtpa) of ore, yielding an annual diamond recovery ranging between 270,000 and 290,000 carats. These projections were estimated to generate robust revenues of US$170 million to US$200 million. However, the operational efficiencies achieved under Thomas’s leadership quickly surpassed these initial expectations. Following the company’s impressive third-quarter results, revised forecasts indicated an anticipated mining volume between 2.9 and 3.1 Mt for the year. This substantial increase in tonnage directly translated into a projected boost in diamond recovery, from the original maximum of 290,000 carats to an impressive 350,000 carats.
Karowe’s Impressive Output and Revenue Outlook
This remarkable increase in carat recovery was primarily attributed to enhanced plant performance, which facilitated a higher recovery rate of smaller diamonds. While these smaller diamonds, by their nature, do not contribute as materially to the company’s overall revenue as the high-value large stones, their increased recovery is a testament to the improved efficiency and optimization of the processing plant. Despite the higher volume of carats recovered, the projected revenue for 2018 was anticipated to fall within the range of $180 million to $190 million, aligning well within the initial guidance of $170 million to $200 million. This demonstrates a stable financial performance amidst operational adjustments and improved recovery rates.
A significant contributing factor to this volume increase and overall enhanced stability was the successful transition between mining contractors. August 2018 marked a pivotal moment as Trollope Mining Services fully assumed responsibility for all waste and ore mining activities. Their performance showed considerable improvement throughout the third quarter and continued its strong momentum, setting a very positive outlook for Karowe’s operational performance for the remainder of its open-pit operating lifespan. This seamless handover and subsequent uplift in efficiency underscore Lucara’s effective management and strategic planning, ensuring sustained productivity and profitability from its flagship Karowe mine.
Unearthing Tomorrow: The Karowe Underground Expansion Project
“Work to determine the viability of developing an underground mine at Karowe is now in full swing,” affirmed Eira Thomas, emphasizing the critical importance of securing the mine’s long-term future. This ambitious undertaking involves several complex and necessary steps, many of which have already been successfully completed. A key milestone was the comprehensive update to Karowe’s mineral resource estimate. The results of this detailed analysis are indispensable for future mine planning, providing the fundamental data required to support the ongoing studies for the potential development of an underground mining operation. This proactive approach ensures a robust foundation for strategic decision-making and investment.
Detailed Mineral Resource Update: A Foundation for Future Growth
The updated resource model revealed several highly encouraging highlights, solidifying the case for the underground project. The remaining indicated mineral resource for the Karowe AK06 kimberlite, a geological formation renowned for its diamondiferous nature, now includes an impressive 7.9 million carats. This substantial reserve is hosted within 57.85 Mt (both in situ and in stockpile), exhibiting an average grade of 13.7 carats per hundred tonnes (cpht) and an average modeled diamond value of $673 per carat. These figures underscore the intrinsic wealth and economic potential still residing within the Karowe deposit.
A notable achievement within the resource update was the successful reclassification of inferred resources to indicated resources for the AK06 kimberlite, specifically within the depth interval between 600 and 400 meters above sea level. This reclassification significantly upgraded the confidence level in these resources, with the new base of the indicated mineral resource now extending to 400 meters (or 600 meters below the surface). Consequently, the in situ indicated mineral resources, as measured at the end of 2017, saw a remarkable 44% increase, providing a much clearer and more reliable picture of the mine’s potential.
Furthermore, the South Lobe of the AK06 kimberlite, a particularly rich section of the deposit, experienced a substantial 54% increase in its remaining indicated mineral resource. This rose from 4.42 million carats to 6.78 million carats, a direct result of converting inferred mineral resources to a depth of 400 meters. Modifications to the internal geological model for the South Lobe also led to the recognition of the Eastern magmatic/pyroclastic kimberlite (EM/PK(S)) unit as the volumetrically dominant unit at depth. This is a critical insight, as historical recoveries from the EM/PK(S) unit have included several exceptionally large and high-value diamonds, such as the iconic 1,109-carat Lesedi La Rona and the magnificent 813-carat Constellation, highlighting its significant potential for future finds.
The importance of the EM/PK(S) unit cannot be overstated; it now accounts for 51% of the remaining South Lobe recoverable indicated carats and 35% of the tonnage. This is a considerable increase from previous estimates, which attributed only 12% of carats and 8% of tonnage to this unit. More strikingly, 75% of the South Lobe indicated recoverable carats within the critical depth range of 600 to 400 meters above sea level are attributable to the EM/PK(S) unit, further underscoring its pivotal role in the underground expansion project.
From Pre-Feasibility to Feasibility: Securing Karowe’s Extended Lifespan
Subsequent to the highly positive 2018 resource update, and in conjunction with the currently budgeted work programmes, Lucara confidently advanced its existing Pre-Feasibility Study (PFS) to a full Feasibility Study (FS). This crucial phase is now actively underway and is projected to be completed in the second half of 2019. The Feasibility Study is an indispensable step, vital for securing Karowe’s operational lifespan significantly beyond its current open-pit expiry date of 2026, aiming to extend it by at least another 10 years through the transition to underground mining.
“At this stage, the intention is only to start mining underground in 2026, maintaining a similar production profile in terms of operational size,” Thomas explained, outlining a carefully phased approach. She further elaborated, “Based on our resource update, we do however expect the grade to increase at depth in the South Lobe,” indicating the potential for even richer diamond yields as mining progresses to deeper levels. This strategic move promises to unlock substantial long-term value for Lucara and its stakeholders.
Revolutionizing Rough Diamond Sales with Clara Diamond Solutions
Beyond her remarkable achievements in operational leadership and mine development, Eira Thomas has also distinguished herself by bringing acute industry knowledge and a forward-thinking approach to the daily management of Lucara. Her tenure has been marked by an astute awareness of technological advancements and the transformative power these can deliver to the business. This foresight led to a groundbreaking initiative that promises to redefine the landscape of rough diamond sales.
Thomas spearheaded and oversaw the successful acquisition closure of Clara Diamond Solutions Corp. Clara is a pioneering company whose primary asset is a secure, digital sales platform meticulously designed to revolutionize the way rough diamonds are bought and sold. This innovative platform is set to unlock significant value for both diamond producers, like Lucara, and diamond manufacturers across the globe, by streamlining a historically complex and often opaque process.
The Clara Platform: Leveraging Technology for Unprecedented Value
Clara utilizes a sophisticated combination of proprietary analytics, robust cloud computing, and cutting-edge blockchain technologies to modernize the existing diamond supply chain. This technological integration is engineered to drive unparalleled efficiencies throughout the entire value chain, from the moment a diamond is unearthed to its final setting on a finger. By leveraging blockchain, Clara ensures immutable diamond provenance, providing transparent and verifiable tracking of each stone’s journey, a crucial step towards enhanced consumer confidence and ethical sourcing.
The Clara diamond platform stands out as a commercially scalable digital ecosystem. Its core functionality lies in applying advanced computing algorithms to precisely match rough diamond production to specific polished manufacturing demand on a stone-by-stone basis. This intricate matching capability is a game-changer for the industry. It empowers buyers to source rough diamonds that are perfectly tailored to their specific polished diamond requirements, which in turn leads to significantly improved margins for both the buyers and the sellers. This targeted approach minimizes waste and maximizes efficiency, optimizing value creation at every stage.
Driving Efficiency and Transparency: The “Mine to Finger” Journey
“After several months of intense commercialization efforts, which are tracking on schedule and under budget, we are excited to be moving forward with our first sale using diamond production from Karowe with supplementary third-party diamond production,” announced Thomas, highlighting the platform’s rapid progress towards market adoption. The platform has garnered substantial interest from the global diamond community, a testament to its disruptive potential and value proposition. Lucara is proud to have secured excellent partners for Clara, comprising leading diamond manufacturers and prestigious jewelry houses, signifying strong industry endorsement and collaborative commitment.
From this foundational stage, Clara is poised for scalable expansion, designed to accommodate diamond uptake from a diverse array of sources across the entire supply chain. Extensive testing on the platform has consistently demonstrated its remarkable potential to unlock greater than 20% of value throughout the diamond pipeline, a benefit that accrues to all participating stakeholders. Furthermore, the comprehensive data collected from these sales will furnish key metrics, providing compelling evidence of the premium Clara can obtain compared to traditional historical tenders and rough diamonds purchased through long-term supply contracts. This data-driven validation will be crucial for further market penetration and broader industry adoption.
Clara’s Commercialization and Transformative Impact
In close cooperation with its manufacturing partners, Clara is committed to rigorously analyzing both qualitative and quantitative feedback regarding their experiences as purchasers. This feedback loop will capture insights at the time of sale and following the delivery of the purchased diamonds, ensuring continuous improvement and optimization of the platform’s services. Additional valuable feedback is anticipated as the diamonds progress through the manufacturing pipeline and ultimately reach their final retail sale, providing a holistic view of Clara’s impact across the entire value chain.
Strategic Advantages and Future Prospects for Lucara
The Clara platform represents an affordable, potentially high-value, near-term growth avenue that is highly compatible with Lucara’s core diamond mining business. More than just a sales channel, it strategically facilitates the expansion of Lucara’s customer base by engaging with new participants in the rough diamond supply chain. This expanded reach is expected to result in higher realized prices for its rough diamonds, enhancing overall revenue and profitability. Beyond this, Clara offers a paradigm shift in how Lucara operates commercially.
The platform provides a stable, continuous cash flow that is no longer rigidly tied to a fixed sales cycle, a common characteristic of traditional tender systems. This newfound flexibility reduces market exposure and provides greater financial predictability. Most importantly, Clara diversifies Lucara’s existing business model, moving beyond purely mining operations to encompass a significant technological and sales component. This diversification holds the potential to deliver strong, supplementary cash flows, augmenting the already substantial revenues generated from the world-class Karowe diamond mine. It represents a forward-thinking step, transforming Lucara into a more resilient, integrated, and technologically advanced player in the global diamond industry.
Conclusion: A Bright Future for Lucara Diamond Corp
Under Eira Thomas’s visionary leadership, Lucara Diamond Corp. is not merely mining diamonds; it is strategically engineering a future of sustainable growth, operational excellence, and technological innovation. From extending the life of its iconic Karowe mine through ambitious underground development to revolutionizing rough diamond sales with the Clara digital platform, Lucara is setting new benchmarks for the industry. The integration of advanced analytics, cloud technology, and blockchain ensures transparency, efficiency, and enhanced value for all stakeholders, securing Lucara’s position as a leader in the evolving diamond landscape. The company’s proactive approach to innovation and unwavering commitment to its strategic objectives promise a remarkably bright and prosperous future.
For more detailed insights, you can read the full digital magazine Click Here.
News Source: miningreview.com