Lucara Diamond Corp. · TSX:LUC
Lucara Diamond — Corporate Update (November 2020)
27 slides from Lucara Diamond's corporate update, November 2020
Slide 1: Corporate Update
Corporate Update NOVEMBER 2020 LucaraDiamond.com | LUC.TSX | LUC.XSTO | LUC.BSE
Slide 2: Cautionary Statement
Cautionary Statement Forward‐looking information There can be no assurance that such forward looking statements will prove to be accurate, as the Company's results and future events could differ materially from those anticipated in this forward- Certain of the statements made and contained herein an
Slide 3: High operating margin
High operating margin 2.9 million Total capital investment less than sustained since production carats sold $200 million began in 2012 $1.6 billion $271 million in revenue in ~8 years in dividends paid 2014 - 2019 Consistent recovery of high value Innovative design Top of class, only mine in +10.8ct
Slide 4: Historic Diamond Recoveries
Historic Diamond Recoveries Lucara has become renowned as one of the world’s foremost producers of large, gem quality diamonds Lesedi La Rona Constellation 1109 carats 813 carats Second largest Sold for a record gem diamond US$63.1 million ever recovered in the world 4
Slide 5: Another Historic Recovery – 998 carats
Another Historic Recovery – 998 carats November 2020 998 carat diamond recovered unbroken from the MDR (mega diamond recovery) in November 2020 High white clivage diamond sourced from the EM/PK(S) unit of the South Lobe Followed a notable series of diamond recoveries during this 998 carats recent pr
Slide 6: Recoveries of specials with the 998 carat diamond
Recoveries of specials with the 998 carat diamond Recovered November 2020 6
Slide 7: Collaboration Agreement on “Sethunya” with Louis Vuitton and HB Antwerp
Collaboration Agreement on “Sethunya” with Louis Vuitton and HB Antwerp November 2020 549 carat white gem diamond “Sethunya”, meaning flower in Setswana, recovered from the Karowe Mine in February 2020 Lucara, Louis Vuitton and HB will collaborate and plan the creation of the highest value polished
Slide 8: Sewelô Collaboration with Louis Vuitton
Sewelô Collaboration with Louis Vuitton Botswana’s Largest Diamond Sewelô “rare find”, an unbroken 1,758 carat near gem quality diamond recovered in April 2019 Collaboration between Lucara (50%), Louis Vuitton (25%), HB Company (25%) – planning, cutting and polishing a collection of diamonds from Se
Slide 9: Consistent Recovery of Large Diamonds
Consistent Recovery of Large Diamonds Specials contribute ~70% by revenue and ~5% by volume Revenue and production includes 2015 to 2019 Life of mine recovery of Since 2012: 15 diamonds in 10 diamonds sold for > US$ 10 176,000 carats of individual excess of 300 carats have million each (not included
Slide 10: Supply Agreement with HB Antwerp
Supply Agreement with HB Antwerp Sale of specials (+10.8 carats) for 2020 All +10.8 carat stones produced from the Karowe Mine Initial price is based on an estimated polished outcome, determined through state of the art scanning and planning technology, with a true-up paid on actual achieved polishe
Slide 11: Transforming the Diamond Sales Process
Transforming the Diamond Sales Process Using Innovation and Technology Opportunity to disrupt the existing supply Matched chain, driving efficiencies and unlocking value to buyer Rough diamonds are sold stone by stone based on polished demand Scan/ID Transparent supply chain for Diamond provenance i
Slide 12: Clara
Clara Clara sales platform (<10.8 carat) 36 sales completed Manufacturers on since inception the platform have doubled in ~US$18.1 million Q3 from 35 to 71 customers and of diamonds sold by value grown 163% in 2020 through the platform Thirty-six sales between December 2018 and October 2020 POSITIVE
Slide 13: 2020 Highlights
2020 Highlights (All currency figures in U.S. Dollars, unless otherwise stated) Karowe Diamond Mine Clara Diamond Solutions Strong Balance Sheet (100%) (100%) Strong, safe, reliable production results; 103% growth in customers from 35 to 71 Cash and cash equivalents of All physicals achieved to plan
Slide 14: COVID-19 Response
COVID-19 Response Operations consistent, Diamond sales continue The Botswana Government declared mining an essential service in late March 2020 and recently extended the State of Emergency to the end of March 2021. Guidelines being followed include increased travel restrictions, work from home, impl
Slide 15: Q3 2020 Financial & Operational Highlights
Q3 2020 Financial & Operational Highlights Three months ending September 30, 2020 (All currency figures in U.S. Dollars) Revenue (millions) Adjusted EBITDA(1) (millions) Average Price ($/Carat) (1) $45.3 $41.3 $11.8 $9.9 $390 $365 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Carats recovered (car
Slide 16: YTD 2020 Financial & Operational Highlights
YTD 2020 Financial & Operational Highlights Nine months ending September 30, 2020 (All currency figures in U.S. Dollars) Revenue (millions)* Adjusted EBITDA(1) (millions)* Average Price (Average $/Carat)* (1) $136.5 $50.2 $436 $82.9 $309 $8.1 YTD 2019 YTD 2020 YTD 2019 YTD 2020 YTD 2019 YTD 2020 Car
Slide 17: Sales Channels 2020
Sales Channels 2020 Sales through Clara, HB Antwerp and Tenders • All +10.8 carats are sold through HB Antwerp; only high value Specials (+10.8 carats) are manufactured and sold as polished • Higher quality diamonds between 1 and 10 carats are sold through Clara; all other diamonds less than 10.8 ca
Slide 18: Diamond Market
Diamond Market Evidence of strengthening market late 2019 was interrupted by COVID-19; Longer term outlook remains strong driven by supply constraints Rough diamond supply and demand 25 20 Optimistic Demand 15 Base Demand Optimistic Supply 10 Base Supply 5 2000 2005 2010 2015 2020F 2025F 2030F Short
Slide 19: Diamond Prices – Rough Versus Polished
Diamond Prices – Rough Versus Polished Polished Prices Have Outperformed Over the Past Year 19
Slide 20: Karowe Underground
Karowe Underground Extending Mine-life to 2040 UG development will double the mine life from the original 2010 Feasibility Study UG would add ~ $4 billion in additional net revenue NPV $1,266 million/$718 million (pre/post tax) @ 5%; No real escalation in price Conservative Price Assumptions: +$200
Slide 21: Underground Feasibility Key Findings
Underground Feasibility Key Findings (All currency figures in U.S. Dollars) Updated geological resource Long hole shrinkage selected Strong Economics on both confirms increasing value as underground mining stand alone UG and OP+UG with depth method (700-310 masl) scenarios OP &UG Combined: Undergrou
Slide 22: Karowe Production Carats by Source & Value
Karowe Production Carats by Source & Value (All currency figures in U.S. Dollars) 2019 Carats by Source UG Carats By Source 2025-39 South Lobe Ore 82% South Lobe Ore 100% 9% 9% 25% 36% Average Price* Average Price* $468/carat $725/carat 64% 57% EM/PK(S) M/PK(S) Centre North EM/PK(S) M/PK(S) *Average
Slide 23: Karowe Underground Next Steps
Karowe Underground Next Steps Based on the assumptions 2020 Plan Rescoped Continue to explore used for the evaluation, COVID-19 Response the project shows Pushed out early surface civil Focus on detailed engineering financing options and early site works using local works due to travel restrictions
Slide 24: Sustainability
Sustainability Mokubilo Farm Initiative Community focused initiative to generate, broad based sustainable income Lucara’s Sustainability Report is prepared In 2018, Lucara became a UN GC participant Lucara is certified by the Responsible in accordance with the GRI Standards: and contributes to 10 of
Slide 25: Total Clarity
Total Clarity The facts on modern diamond mining Total Clarity Report by Trucost examined 150 metrics across the Natural Diamond Council (NDC) members which comprise approximately 75% of the world’s diamond production with global operations including Botswana, Russia, South Africa, Lesotho, Australi
Slide 26: Conclusions
Conclusions Lucara is a premier, mid-tier, investible diamond company, positioned for long term, sustainable growth High margin diamond producer Botswana - a low risk jurisdiction Strong balance sheet and available liquidity Consistent recovery of high value Specials (+10.8 carats); Open pit mineabl
Slide 27: Contact
Contact Suite 502 1250 Homer St. Vancouver, BC V6B 2Y5 Canada Tel: +1 604 674 0272 Email: info@lucaradiamond.com LucaraDiamond.com | LUC.TSX | LUC.XSTO | LUC.BSE