Good morning. My name is Ludi and I'll be your conference operator today. At this time, I would like to welcome everyone to the Lucara Diamond 2024 First Quarter Results Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question- and- answer session. If you would like to ask a question during this time, simply press *1 on your telephone keypad. If you would like to withdraw your question, please press the * 2. Thank you. Mr. William Lamb, you may begin your conference.
Thank you very much, and thank you, everybody, for dialing into the Lucara Q1 2024 results with me. I have Glenn Kondo, our CFO. We'll just flip through the slides. Most probably, easiest is to talk through those. So, if we're going on to the third slide, our first one there, we'll assume that everybody has read through the cautionary statements. J ust really the highlights from the quarter— I'm just going to touch on a couple of these. We had $41 million of diamonds sold through our three channels: t his includes the HP agreement, Clara, and regular tenders. About 93,500 carats were sold , generating $41 million, which is in line with what we did last year. But I want to jump down to the 5.18% specials recovered, w hich is below what we would normally expect when mining in the South Lobe.
We're normally targeting around 6.8% specials. Still, 160 specials— stones over 10.8 carats recovered during the month. But, obviously, the quality of those is something that we cannot control, and we'll most probably discuss that a little bit later. One thing I do want to draw your attention to is, again, the operating margin of 51%, operating costs at $26 a ton processed for the quarter. Glenn will most probably touch on that and just emphasize just how good that is compared to the guidance and where we are training and what has actually caused that. So moving on, the next slide down we're just touching on, and this is a bit of a refresher, the debt facility which we have in place for the underground that was completed in January and signed off.
We have $140 million drawn out of the project loan and $25 million out of the working capital facility as of the end of Q1. The balance of the cost overrun facility sits at $37 million, and we do have until, correct me if I'm wrong, Glenn, June 2025 to fill that to a balance of around $61 million. In terms of the progress made on the underground, we are really making great strides. I guess it's great depths. During the quarter, we're now sitting in the ventilation shaft at the end of the quarter, 426 meters below collar, and we're ahead of the rebase. This is the July 2023 schedule there. In the production shaft, we were 449 meters below collar. Where we stand today as of yesterday, the vent shaft has now gone through the 500 meters below collar, and the production shaft is at about 525.
We've done the probe drilling for the 470-meter drilling station or station development, so things are actually progressing extremely well. The risk which had been identified when sinking through the mirror, this is an aquifer zone that sits above the granite basement. We had some very, very low water flows in there, if any, in some of them, and the progress was very, very rapid. So we're actually now sitting ahead of the rebase schedule in terms of both the ventilation shaft and the production shaft development. In terms of other activities on site, the bulk air coolers are now nearing completion. During May of this year, we'll start to commission those ones. And it's now really looking at the engineering and getting that advanced, including the lateral development contract, to align with where we are moving with the production shaft and the ventilation shaft sinking. Thank you.
So in terms of the overall expansion, we don't have to spend too much on this. I've most probably covered it. But the focus now is on the next step. So when we look at our 100-day look ahead, the RFQ is out for the lateral development contract. We are now looking at getting the bids in by end of the third quarter, with that contract being awarded in the fourth quarter. So that is obviously going to play a very, very important role in the next big thing which we're needing to do underground. And getting ahead of the curve in terms of the planning and the development of that is obviously a key focus. I've already touched on the bulk air coolers, and I think that covers most of what we have on the slide.
I think the main focus for the back end of the second quarter of this year, really into end of May and into June, is going to be the developments around the 470 station. And we'll show you one or two pictures two slides down in terms of what it looks like at the 670, and we're going to redo that at the 470, another 200 meters deeper than that. Thank you. So just a couple of pictures. This is the station at the 670 on the vent shaft, and I can tell you it's the vent shaft because I can see the hole is a lot smaller than the production shaft. All the civil work has now been completed. The drawbridge, which you can see to the right of the cage around the shaft, all of those very well integrated with our safety processes, and then just the jumbo.
It's great that the jumbo is now below the stage. So when we get down to the 470 to sling that underneath the stage and move it down is much easier than trying to get that through the 6-level stage. The picture on the right here actually shows the lateral development that links the ventilation shaft and the production shaft. So this is looking west from the production shaft towards the ventilation shaft. That's about 100 vertical or 100 horizontal meters. And then you have the access and the stations around the shaft as well. And then the image on the right just looks at this is the view of the production shaft from the sub-bank. Interesting, there is you can actually see the pipework is actually already done, and the shaft is entirely concrete lined.
I mention those specifically because as we're going down, the pipework which you see there is the final pipework. So when we get to the bottom of the shaft and we start to equip it, we don't actually have to go back and redo that. So we're looking at how we can actually advance things, and I think that's normal course of business. Moving on. I mentioned the bulk air cooler. Image on the left there is the final bulk air cooling system, big fans in there that actually drive the air into the production shaft and then out the vent shaft. The image on the right is most probably the heaviest component that we actually take underground, which is your primary underground jaw crusher, and all the components are now delivered to sites. Obviously, that was awarded ahead of the rebase.
So you can see it's all literally vacuum-packed, and we'll keep it in that state until it's ready to go underground. Moving on again, just looking at what makes the mine special. I've said this a number of times in public presentations recently. In my lifetime, and most of the people on the course's lifetimes, there will never be another asset which has the ability to generate the same diamond population as what Karowe has. We've seen that from 0.3% of world production, we actually have a significant portion of the global market for stones over 50 and over 100 carats. The SFDs which you see there, you can see the variability. The graph which you see on the left-hand side, there really talks to that. If you look at the difference between 2017 and 2021, it's a huge span of what the resource will produce.
It's with this variability which we are obviously dealing with on a go-forward basis, and that is a critical component of us funding the underground project. But if you look at the graph on the right-hand side, and it talks to what is expected. A lot of people will go, "Well, this is just an SFD." No, it's actually based on actual data. So when we've mined EMPKS material, we get north of 7 actually; in April, it was 8.68% specials. I mention that again because it's going to come into when Glenn goes through the financials of how variable this deposit is and how that plays into what we can expect on revenue going forward.
But the key things there are, if we look at the upside and when I talk about upside, the financial models and the justification for the underground does not include anything which is exceptional. And to date, the volume of material that we've processed from the EMPKS averages at around about 16%-20%. And the vast majority of the 11 diamonds which we've recovered and sold over $10 million, which equates to more than $237 million of additional revenue not included in any forecast which we have at the moment, most of that has come from the EMPKS. When the underground matures and we start to mine in 2028 solely from the underground, it's 100% of EMPKS material. And that's really what that curve on the right-hand side there talks to. Thank you.
Just moving on in terms of the I mentioned the 160 specials recovered, 5.18% specials, and that's obviously much lower than what we would expect. Then, of course, the resource turns around in April, and the stones which you see in the image there, which includes a 225-carat Type IIa white stone. I will say this internally because of how it affects the market. We don't consider, in terms of materiality, the 225 to play into that. We have set our materiality at around about 400 carats. And we do really understand that when we start to produce a fairly large volume of stones over 100 carats, it's not the best thing in the market when they know that there are a lot of large stones available.
So we have assessed how we actually manage that from a company perspective, and I think it plays into a lot of vigilance in terms of how we manage the top end of the market with what we're actually producing. Thank you. So moving on, we actually and I touched on the sales through our three channels, Clara obviously being an important component of those. Moving on to the next one. And when we look at the sales through the year actually, just history, we've now had 95 sales of diamonds on Clara, the vast majority of that being stones from the Karowe mine, and that's generated $109 million worth of value. And when we look back at that, it's most probably a 15%+ uplift on what we would expect on a tender basis.
Through Q1, 33% of the diamonds sold on Clara were from third party, and that's where we've actually and when I talk to the ability for Clara to actually generate value, the 33%, those are diamonds which we actually won on tender. So we've actually gone out and we've paid the top price for those diamonds. When they go on to Clara, we still see a 10%-15% and sometimes higher than that uplift on those diamonds. And I think that talks to the technology and its ability to target individual stones and the value that an individual stone can generate versus somebody buying a parcel of stones where they don't actually have a final buyer for the total volume of those stones.
Moving on, when we look at the overall sales through the quarter, and these are obviously sort of subject to the volumes, that's a really good breakdown of where we actually sit. Revenues delivered and recognized to HB were obviously affected by the volume and the quality of the larger stones recovered during the quarter. And I think that's where we see the biggest variability on what was expected versus where we are now. But again, you flip back a couple of slides and we go back to the SFD, and we know that on average, we're going to find the higher-value, higher-quality stones. And the image which we included of the 225 talks exactly to that. So moving on, I'm going to hand over to Glenn to go through the operational highlights and the financials, and then we'll get on to the question and answer. Thank you, Glenn.
As William mentioned, we saw strong operating performance during the quarter. The operations delivered high levels of ore mined and ore processed during the period, and we're very much well within guidance. As William touched on as well, operating costs per ton at $26 per ton reflects the continued strong cost control at the Karowe mine. What we're also seeing in Botswana is inflation is easing, and we're also benefiting from the impact that we're seeing from the strong US dollar versus the BWP. In terms of what we're targeting, that's very much on the lower end of guidance, and we're targeting actions to be in guidance this year. In terms of carats sold, as William touched on, 94,000 carats were sold during the period, 10,000 carats higher than last year. This reflected the larger volume of sales of minus 10.8 carats sold on tender.
What we did see, however, during the quarter is a lower volume of the plus 10.8 carats that were delivered to HB, and what this has resulted in is an additional draw from the project loan to fund the underground development during Q2. The lower volume of plus 10.8 carats diamonds sold during the period, it does reflect the variability of the resource. And as William was saying, we have seen a recovery in the plus 10.8s in April. What we are expecting is to see this continue as we mine further ore from the EM/PK(S) during the remainder of 2024. So we are expecting an uplift in our cash flows during H2 this year. And it should be said that the additional project loan draw is not due to a cost overrun on the project.
What we're seeing is it's advancing very well, and it's according to the rebase project plan. The next slide, panel. One area I wanted to cover here is the overall net loss. You'll see that's increased by $9 million this year. And really, this is a one-off transaction cost due to the rebase agreement. Under IFRS, the rebase loan agreement is considered a new loan. And what we have to do is take all the previous initial arrangement costs plus all the costs to set up the new rebase agreement, including legal costs, commitment costs, and then reflect them in the profit and statement of operations. So you're seeing $10.5 million reflected in that net loss position during the year. So overall, operating performance in the underground development has performed extremely well, and we're well within budget and guidance.
Again, here, we're very much on target in terms of all our guidance numbers. The one area we are looking at is the revenue guidance just due to what we've seen at the beginning of this year. But at this point, we're holding to $220 million-$250 million.
Thanks, Glenn. So just before we close off, and I think this is probably one of the most important components, and if you ever go and have a look at our corporate presentation, this is what we have upfront. And it really talks to the relationship that Botswana has with diamonds.
I mentioned to the president a couple of weeks ago the relationship that diamonds have with Botswana, and he actually corrected me and said, "No, Botswana has with diamonds." I think when we start to look at the overall market, there's always negative sentiment in the market about, "Oh, lab-grown stones and the prices are weak," etc. But I think it's important to reiterate the value that diamonds has actually made to a country like Botswana. Lucara is able to play a very important role in that, in funding and providing funding for microbusinesses, the farms, the abattoir. You can go through the images there, the programs which we actually have and how that actually drives economic improvement within Botswana itself, being able to run the GM cycle tour. I found this out a couple of weeks ago.
The cycle tour which Joe, our GM, has been running for about seven years now actually generates between BWP 1.4 million and BWP 1.6 million in returns, and that goes to funding school programs and education. The image above that is for gender-based violence. There's all these additional intangible value adds that we see in Botswana. If you go back and you read the history of Botswana from the discovery of diamonds between 1966 and 1969 and how that has actually transformed a country from one of the poorest countries in Africa to now the fifth highest GDP per capita in Africa, and it really talks to the value that diamonds actually play in driving specific economies. It's important.
I want people to understand that when you start to look at or even think about buying a lab-grown stone, understand what that lab-grown stone is doing to other countries where you're taking revenue away from countries like Botswana where you can actually see these incredible benefits that the country gets from its diamond mining sector. And just a little bit, when we start to look at the programs that we're involved in and I won't go through all of these in detail, but the money is irrelevant in terms of whether the business is actually making all of these are actually making a profit, including the abattoir in Q1. But what I want you to draw or want you to draw your attention to the number of people that benefit from the programs which we actually have. And these are significant all the way.
There are about 57,000 people, and it's really giving access and listening to the communities and understanding what it is that they need and how we can actually assist them in those programs. I think that's an important component. Really, when we start to look at Lucara as not just a diamond mining company, we're actually working with local communities, the municipalities, the councils, etc., to drive value from what we're actually doing in country. Just taking that a bit further, we actually are signed up to the UN Global Compact, and out of their 17 goals, we actually have 10 which we are working towards. Again, this is an important component. It's no longer something which we just say in the back end of the presentation, even though these are close to the back end.
That is now a very, very important component, I think, of any mining company moving forward in how you actually run stewardship through your operations. So just in closing, what are we and it is. We always talk about how incredible this asset is, and I think a lot of people look at the comment from the CEO and the press release, and they go, "We continue to reiterate," but the resource has never disappointed. Every now and again in a quarter, we don't get what we want, which is exactly what happened in this past quarter. But you look at how it has come back in April, but it has continued from when we discovered the first large stone in Q1 2013, the 239-carat.
Since then, it just has been an incredible journey, and we see what the resource has actually been able to deliver and the value that we get from it, not just for shareholders in the local communities and all stakeholders. We are learning from the past when we look at the underground development, the challenges which were faced, and really how we manage our forward-looking schedule and the risks associated with that. One of the things which I do want to emphasize and we speak about the underground, but the chaps across on the operation just continue to drive value.
If you go back and you have a look at the tons processed and the waste processed and the carats recovered, everything which actually we've said we were going to do on an operational side has actually delivered the value, and that's what allows us to continue doing what we have been doing. I talked about the support from the Lundin Group, and we could get into some details if anybody wants. I think we chatted about last time the guarantees which the Lundin family have actually provided as part of the debt financing. Then again, the social and environmental focus is a critical component of, I think, the success of any mining company now, regardless of where you are operating.
We spend a lot of time working on that one, and I think it'll be evident when our sustainability report comes out round about the middle of the year. That brings us to the end of the conclusion. If I could hand it back to the operator, please, for our question and answer session.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question during this time, simply press the star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, please press the star followed by the number 2. If you're using a speakerphone, please lift the headset before pressing any keys. One moment, please, for your first question. Once again, if you would like to ask a question, please press the star followed by 1.
Well, I see based on our system here that there are no questions, so I'm hoping that everybody got the information that they were looking for. We'll wait a minute or two just to see if there are any questions. If not, I guess, operator, we can go to closing remarks.
All right. Thank you, presenters. Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.
Thank you very much.