VANCOUVER, BC, March 23, 2021 /CNW/ - (TSX: LUC) (BSE: LUC) (Nasdaq Stockholm: LUC)
Lucara Diamond Corp. is pleased to announce the execution of a mandate for a senior secured project financing package of up to US$220 million (the "Mandate") to fund the underground expansion at Lucara's 100% owned Karowe Mine ("Karowe") in Botswana. A syndicate of five international financial institutions, including ING Bank N.V. ("ING"), Natixis ("Natixis"), Socit Gnrale, London Branch ("Socit Gnrale"), Africa Finance Corporation ("AFC") and Afreximbank ("Afrexim") will act as the Mandated Lead Arrangers ("MLAs"). The formal Mandate includes a non-binding indicative term sheet for debt facilities of up to US$220 million (the "Facilities"). Closing of the Facilities is targeted to be mid-2021, with financing in place for the second half of 2021. View PDF Version
Eira Thomas, President and CEO commented: "The mandating of five leading international financial institutions, with strong mining and metals track records and significant experience in Africa, for the arrangement of +$200 million senior debt facilities, is a significant achievement for Lucara. This debt package will supplement cash flows from continued operations of the Karowe open pit over the next 5 years, extending Karowe's mine-life out from 2025 until at least 2040. The project is underpinned by strong economics, is expected to payback in under three years and contribute more than $4 billion of additional revenues using conservative diamond pricing assumptions. We are targeting completion of the project financing package by mid-year, with full project sanction thereafter.
The interest of top tier financial institutions further validates Lucara's reputation as a leading, high margin diamond producer, which has demonstrated resilience throughout the pandemic. Karowe is highly levered to strengthening diamond prices and is well positioned to take advantage of the current market, as we have observed prices recovering to pre-pandemic levels in early 2021."
The execution of the Mandate is a key milestone in the project financing process for the Karowe underground expansion, which has an estimated capital cost of US$514 million and a five-year development period. The balance of development capital is expected to come from operating cash flow generated by open pit operations at Karowe during the development period. The MLAs have commenced detailed due diligence on all aspects of the financing and Lucara continues to work with them to conclude the due diligence process in the near term. Closing of the Facilities is subject to completion of the customary processes including due diligence, final credit approvals and execution of final documentation.
Terrafranca Advisory Limited is acting as financial advisor to the Company. Norton Rose Fulbright LLP is acting as legal counsel to the Company.
Eira Thomas
President and Chief Executive Officer
https://www.newswire.ca/news-releases/lucara-announces-senior-secured-project-finance-facility-mandate-for-the-underground-expansion-of-the-karowe-mine-829257567.html