Lucara Diamond Corp. · TSX:LUC
Lucara Diamond — Corporate Update (October 2019)
24 slides from Lucara Diamond's corporate update, October 2019
Slide 1: Corporate Update
Corporate Update October 2019 LucaraDiamond.com | LUC.TO
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT Forward‐looking information uncertainties describe under Risks and Uncertainties disclosed under the heading “Risk Factors” in the Company’s most recent Annual Information This investor presentation contains forward‐looking statements and Form available at http://www.sedar.com.
Slide 3: Karowe Diamond Mine
KAROWE DIAMOND MINE KAROWE DIAMOND MINE Large, High Value Open Pit Reserves to 2026 Innovative Design Diamonds Potential underground expansion First diamond mine to use state of the DN 7.9 million carats to at least 2036 art XRT technology for primary diamond OMA I at $673/ct (Indicated) recovery D
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 carat 813 carat Second largest gem Sold for a record diamond ever $63.1 M USD recovered in the world LUCARA DIAMOND 4
Slide 5: Lesedi La Rona & Constellation
LESEDI LA RONA & CONSTELLATION The 1,109 carat Lesedi La Rona was recovered in 2015 and purchased by Graff in 2017 for US$53 million resulting in the 302.37 carat Graff Lesedi La Rona; Graded by the GIA, one of the world’s largest square emerald cut diamonds; 66 satellite diamonds were also cut rang
Slide 6: 2019 Record Diamond Recovery
2019 RECORD DIAMOND RECOVERY Sewelô, an unbroken 1,758 carat near gem quality diamond recovered in April 2019; largest diamond from Karowe to date One of the largest diamonds in the world and the largest for Botswana A ‘kernel’ stone of clean white material with windows through the diamond, domain o
Slide 7: Operational Highlights H1 2019
OPERATIONAL HIGHLIGHTS H1 2019 All currency figures in U.S. Dollars, unless otherwise stated 100% Owned 100% Owned Dividend & Karowe Diamond Mine, Clara Diamond Strong Balance Botswana Solutions Sheet Continued strong safety and Five sales successfully Quarterly dividends of CDN operational performa
Slide 8: Safety, Health, Environment & Community Relations
SAFETY, HEALTH, ENVIRONMENT & COMMUNITY RELATIONS Over two years (>7 million Mokubilo Farm man hours worked) Initiative without a lost time incident (LTI) Community focused initiative to generate, 769 LTI free days at June broad based 30, 2019 sustainable income All injury frequency rate Phase 1: bu
Slide 9: Sustainability
SUSTAINABILITY Lucara’s Sustainability Report is prepared in accordance with the GRI Standards: Core option, and selected G4 Mining and Metals Sector Disclosures In 2018, Lucara became a UN GC participant and contributes to 10 of the 17 UN SDGs LUCARA DIAMOND Lucara is certified by the Responsible J
Slide 10: Total Clarity
TOTAL CLARITY THE FACTS ON MODERN DIAMOND MINING Total Clarity Report by Trucost examined 150 metrics across the DPA members which comprise approximately 75% of the world’s diamond production with global operations including Botswana, Russia, South Africa, Lesotho, Australia, Zimbabwe and Tanzania.
Slide 11: Diamond Market
DIAMOND MARKET Long term fundamentals strong but pricing environment in short to medium term is challenged, De Beers and Alrosa sales at lowest levels since 2017, mid-stream continues to struggle, polished demand weak Millennials will be the ROUGH DIAMOND Overlap of supply and demand in highest‐spen
Slide 12: Lucara Diamond Sales 2019
LUCARA DIAMOND SALES 2019 (All amounts in U.S. Dollars unless otherwise indicated) • A total of 196,988 carats were sold for gross revenue of $91.2 million, $463/carat • 14 diamonds which sold for > $1 million, including 6 for > $3 million • 115 carat sold for $3.66 million; 77 carat faint pink sold
Slide 13: Consistent Recovery of Large Diamonds
CONSISTENT RECOVERY OF LARGE DIAMONDS REVENUE AND PRODUCTION Includes 2015 to 2018 Specials contribute ~70% by revenue and ~5% by volume • Life of mine recovery of > 126,000 carats of individual stones > 10.8ct (over 4,400 diamonds) 100% • Since 2012: 15 diamonds in excess of 300 carats have been 80
Slide 14: Global Achieved Average Diamond Prices 2018/2019
GLOBAL ACHIEVED AVERAGE DIAMOND PRICES 2018/2019 (All amounts in U.S. Dollars per carat unless otherwise indicated) $2,131 $1,697 Lucara’s Average price ~4x Global Average 2018 $502 YTD 2019 $463 YTD 2019 Median $126/Carat $164 $126 $121 $128 $105 $79 $75 $76 $74 $68 LUCARA DIAMOND 14
Slide 15: 2018 Geological Model
2018 GEOLOGICAL MODEL South Lobe AK06 EM/PK(S) POSITIVE FOR UNDERGROUND FEASIBILITY STUDY 1000 masl • Underground Feasibility study initiated 900 masl 2018 driven by current and past M/PK(S) performance of resource EM/PK(S) 800 masl • Since onset of mining in 2012: 16 million tonnes processed, 2.6 m
Slide 16: Organic Growth: Expanding Karowe Underground Beyond 2026
ORGANIC GROWTH Expanding Karowe Underground Beyond 2026 • Substantive field programs completed in April 2019, over 24km of geotechnical and resource drilling, additional ~8km of hydrogeological drilling in addition to test pumping, modeling and outfitting of new de-watering wells • Significant proje
Slide 17: Transforming the Diamond Sales Process
TRANSFORMING THE DIAMOND SALES PROCESS Using Innovation and Technology Opportunity to disrupt the existing supply chain, driving efficiencies and unlocking value Rough diamonds are sold stone by stone based on polished demand Diamond provenance is assured Exclusive collaboration with Sarine Technolo
Slide 18: Clara Sales Platform
CLARA SALES PLATFORM 2019 • Five sales completed during H1 2019 with $2.9 million of diamonds transacted through the Eleven sales between platform December 2018 and October 2019 POSITIVE RESULTS • Frequency of sales and number of participants increasing • Manufacturers on the platform have grown fro
Slide 19: H1 2019 Financial Highlights
H1 2019 FINANCIAL HIGHLIGHTS (All amounts in U.S. Dollars unless otherwise indicated) REVENUE ADJUSTED EBITDA(1) NET INCOME (MILLIONS) (MILLIONS) (MILLIONS) $89.9 $91.2 $37.5 $38.6 $12.7 $8.1 H1 2018 H1 2019 H1 2018 H1 2019 H1 2018 H1 2019 AVERAGE PRICE OPERATING COST EARNINGS (AVERAGE $/CARAT) (1)
Slide 20: H1 2019 Operational Highlights
H1 2019 OPERATIONAL HIGHLIGHTS (All amounts in U.S. Dollars unless otherwise indicated) ORE MINED ORE PROCESSED (TONNES) (TONNES) 1,784,910 1,476,350 1,333,068 630,242 1,297,710 H1 2018 H1 2019 H1 2018 H1 2019 CARATS RECOVERED CARATS SOLD OPERATING MARGIN (000’S) (0000’S) (%) 65% 63% 241,648 196,989
Slide 21: 2019 Outlook
2019 OUTLOOK (all amounts in U.S. Dollars) $170 – $200 million 3.0 – 3.4 million (revised) $32 – $37 per tonne of DIAMOND REVENUE ORE TONNES MINED ore processed OPERATING CASH COSTS 375,000 – 420,000 (revised) 2.5 – 2.8 million DIAMOND SALES (CARATS) ORE TONNES PROCESSED 342 ct 375,000 – 420,000 (re
Slide 22: Conclusions
• High margin diamond producer CONCLUSIONS • Botswana - a low risk jurisdiction Lucara is a premier, mid-tier, investible • Strong balance sheet diamond company, positioned for long • Open pit mineable reserves to 2026, term, sustainable growth potential for underground to least 2036 • Asset diversi
Slide 23: Capital Structure
CAPITAL STRUCTURE LUC ~C$460M US$7.1M (June 30, 2019) Lucara is a publicly listed MARKET CAP company trading under US$45.0M (available) the symbol “LUC” Credit Facility $5.0 M (September 30, 2019) CASH ON HAND TSX WORKING CAPITAL FACILITY NASDAQ Sweden 22% Fully Diluted Basis BSE (Botswana) 396.9M (
Slide 24: Contact
CONTACT Suite 2000 885 West Georgia St. Vancouver, BC V6C 3E8 Tel: +1 604 689 7872 Fax: +1 604 689 4250 Email: info@lucaradiamond.com LucaraDiamond.com | LUC.TO