Lucara Diamond Corp. · TSX:LUC
Lucara Diamond — H1 2014 Earnings Presentation
21 slides from Lucara Diamond's earnings presentation, August 2014
Slide 1: Lucara Diamond Corp. H1 2014
LUCARA DIAMOND CORP. H1 - 2014
Slide 2: Cautionary Statement
Cautionary Statement Forward-looking information This document contains statements about expected or anticipated future events and financial results of Lucara that are forward- looking in nature and are based on Lucara’s current expectations, estimates and projections. This forward-looking informati
Slide 3: Lucara 2014 Guidance
9.46 carat blue diamond sold for $477,272 per carat Lucara 2014 Guidance Karowe • Forecast revenue of $240 - $250 million • Carat production of between 400,000 - 420,000 carats • Operating costs of $31 - $33 per tonne • Capital expenditure of $50 - $55 million • Updated NI43-101 Technical Report (Fe
Slide 4: Capital Structure
1.79 carat pink diamond sold for $60,256 per carat Capital Structure • Listed Exchanges under Symbol “LUC” • TSX • NASDAQ OMX (Sweden) • BSE (Botswana) • Issued share 379M • Fully diluted shares 381M • Options 2.4M (C$ 0.89 WA exercise price) • Warrants Nil • Convertibles Nil • Market Cap C$ 950 mil
Slide 5: Focused on Southern Africa
Focused on Southern Africa Karowe Mine 100% Owned Production Mothae Project 75% Owned Advanced Exploration 5
Slide 6: Resource Update
Resource Update • Updated resource statement for the Karowe deposit issued in Dec 2013 • Primary change is in the value of the diamonds • Centre lobe $351/ct, up from $276/ct • South lobe $413/ct, up from $231/ct • 2014 sales average diamond price - $764/ct • Resource continues to deliver significan
Slide 7: Geological Model
Geological Model Plan view of geological model North Central South North “gap” WK(N) WK(S) WBBX(S) 1000masl WK(C) WKBBX(N) “gap” CFK(C) BBX(S) WKBBX(N) 900 BBX(N) BBX(C) Central M/PK(S) 800 FK(N) FK(C) South 700 IntBas(S) Pit outline – Aug 2014 600 520masl 7
Slide 8: Karowe Operating Performance
Karowe Operating Performance Adjusted Net Income Operating Earnings (millions) (millions) Variance H1 2014 H1 2013 2013 Full Year +69.1% +38.9% % $48.7 $69.6 Mining and Process $50.1 Ore processed (t) 1,345,542 1,094,170 23% 2,355,000 $28.8 Carats recovered (cts) 210,179 210,808 0% 440,750 Plant fee
Slide 9: Sales Update
Sales Update 135ct 140ct 256ct 123ct 239ct Collection of large exceptional diamonds sold in 2013 Karowe H1 2014 Specials Distribution 160 145 140 120 • During H1, 2014, more than 210,000 120 carats were sold for gross revenues of 100 80 76 $128.6 million 60 50 40 • A total of 440 diamonds larger tha
Slide 10: Sales Update
Sales Update • Two Exceptional Stone Tenders (“EST”) have been held in April and July, generating over $89M in revenue • Lucara expects to sell between 400,000 and 420,000 carats of diamond in 2014 • Sales will occur through 7 diamond tenders and 3 EST’s • Sales migration plan for all regular sales
Slide 11: Sales Update
Sales Update Diamonds sold in the second Exceptional Stone Tender 11
Slide 12: 2014 Capital – Plant Upgrade
2014 Capital – Plant Upgrade Plant Modifications • Planned as part of the original feasibility study to address the treatment of harder and higher yield south lobe material • Upgrade designed to ensure sustainable 2.5 million tonnes per annum throughput • Inclusion of a “Large Diamond Recovery” circ
Slide 13: 2014 Capital – Plant Optimization Project
2014 Capital – Plant Optimization Project Pebble crusher bleed screen XRT units being readied for Factory Acceptance Testing XRT Building foundations Early Large Diamond Recovery circuit conveyors 13
Slide 14: Management's Focus
135.38 carat diamond sold for $47,028 per carat Management’s Focus Lucara • Continue to strengthen balance sheet • Develop resource extension programs for potential new and current assets Karowe • Estimated annual diamond revenue of $240 - $250 million • Carat production of 400,000 - 420,000 carats
Slide 15: Contact Information
Contact Information Address Phone and Fax Email and Web Suite 2000 Ph. 604-689-7842 lucara@namdo.com 885 West Georgia St. Fx. 604-689-4250 Vancouver, B.C. www.lucaradiamond.com Canada V6C 3E8 15
Slide 16: The Diamond Market
The Diamond Market The Diamond Sector – Supply/Demand Rough-diamond supply and demand, 2009-2023, base scenario, 2012 prices, $ billions High Forecast Demand 30 28 Base Demand 26 Low 24 Demand 22 Production 20 Increase Base 18 Production 16 Stable Production 14 12 10 2008 2010 2012 2014F 2016F 2018F
Slide 17: The Diamond Market
The Diamond Market Global Rough Diamond Production Production declined significantly during the crisis and volumes have yet to recover Bain & Company – The Global Diamond Report 2013 17
Slide 18: The Diamond Market
The Diamond Market Expected New Mine Production New mines are expected to add 18 million carats a year by 2023 Bain & Company – The Global Diamond Report 2013 18
Slide 19: The Diamond Market
The Diamond Market Global Diamond Jewelry Market Diamond Jewelry Demand (2012) 7% 7% 13% 38% 12% 15% 8% USA China India Japan Europe Persian Gulf Other Bain & Company – The Global Diamond Report 2013 19
Slide 20: The Diamond Market
The Diamond Market Rough Diamond Demand (2012 – 2023) Driven by India and China and is expected to reach $26 billion Primary demand increase Bain & Company – The Global Diamond Report 2013 20
Slide 21: The Diamond Market
The Diamond Market Commodities versus Diamond Performance Normalized to January 2011 2.50 Al 2.00 Cu Ni 1.50 Pb Zn 1.00 Au Diamonds 0.50 0.00 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 • Rough diamond prices have increase, on average, 5 – 8% during the first quarter of 201