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July 13, 2021

Lucara finalises $220m in funding for Karowe expansion project in Botswana

The package includes a $170m project finance facility for the Karowe underground expansion and a $50m working capital facility.

Lucara Diamond has finalised $220m senior debt facilities with five mandated lead arrangers to fund the expansion of the Karowe underground diamond mine in Botswana.

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The mandated lead arrangers are African Export-Import Bank (Afreximbank) Africa Finance, ING, Natixis, and Societe Generale, London Branch. Afreximbank served as the facility agent.

The package includes a $170m project finance facility to support the Karowe underground development project, and a working capital facility of $50m to re-finance the existing debt and support operations.

Lucara Diamond president and CEO Eira Thomas said: “Lucara is excited to be moving forward with a fully financed underground expansion project, extending Karowe’s mine life to at least 2040 and projected to deliver at least $4bn in additional revenues using conservative diamond price assumptions.

“The development of the underground expansion project will adhere to all required environmental regulations and comply with Equator Principles.”

The company expects the first drawdown early in the third quarter of this year.

Lucara Diamond said: “In connection with the facilities, the company’s largest shareholder, Nemesia has agreed to provide a limited standby undertaking in the event of a funding shortfall occurring up to 36 months from financial close (the ‘Shareholder Undertaking’).”

Thomas added: “We believe this expansion project comes at the right time in the market cycle, with improving supply and demand fundamentals helping to stabilise and support stronger diamond prices in the short and longer-term.”

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What’s missing from your IPO industry assessment?

IPO activity all but stopped in 2020, as the investment community grew wary of the effects of COVID-19 on economies. No matter how deserving a business was of flotation, momentum was halted by concerns of when a ‘new normal’ of working patterns and trade would set in. Recently, sentiment has changed. Flotations picked up again during the second half of 2021, and now in 2022 the mood is decidedly optimistic. Business leaders have their eyes on fast rebounding economies, buoyant market indices and the opportunity once again to take their businesses public. As a result, global IPOs are expected to hit back this year. With GlobalData’s new whitepaper, ‘IPOs in Consumer and Retail: 5 must-include elements for your prospectus industry report’, you can explore exactly what is needed in the essential literature. GlobalData’s focus lies in the critical areas to get right:
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  • Consumer context
  • Industry environment
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