Canada-headquartered Lucara Diamond Corp has closed a $350-million senior secured bond issue, providing the financial certainty needed to take its Karowe underground project (UGP) in Botswana through to completion.
The five-year bonds carry a fixed coupon of 12.5% a year, with interest payable quarterly. Proceeds from the financing have been used to fully repay the company’s existing $220-million project finance facilities, simplifying Lucara’s capital structure while improving liquidity and flexibility.
The balance of the funds will be directed towards establishing a debt service reserve account covering two years of interest payments, as well as supporting the continued development of the Karowe UGP.
CEO William Lamb described the transaction as a “pivotal milestone”. “[The financing] significantly strengthens our balance sheet and provides the financial certainty required to advance the UGP through to completion,” he said.
Beyond the immediate funding, the bond structure also provides additional strategic flexibility, including the option to raise a further $50-million through a tap issuance and the potential to add a $50-million revolving credit facility.
With the financing now in place, Lucara has secured access to sufficient capital to complete the underground expansion, subject to execution in line with its updated feasibility study.