Lucara Diamond Corp. · TSX:LUC
Lucara Diamond — FY2021 Earnings Presentation
24 slides from Lucara Diamond's earnings presentation, Feb 25, 2022
Slide 1: 2021 Results Conference Call
2021 Results Conference Call FEBRUARY 25, 2022 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: Fiscal 2021 Highlights
Fiscal 2021 Highlights (All currency figures in U.S. Dollars, unless otherwise stated) Karowe Diamond Mine Clara Diamond Solutions Balance Sheet & Liquidity Revenues of $230.1 million or $603 per 88 Buyers; active waitlist Strong cash position and carat available liquidity Third party supply added t
Slide 4: Consistent Recovery of Large Diamonds
Consistent Recovery of Large Diamonds Specials contribute ~70% by revenue and ~5% by volume historically Revenue and production 2021 Recoveries: includes 2015 to 2021 Since 2012: 25 diamonds 11 diamonds sold for > US$ 39 diamonds > 100 carats in excess of 300 carats 10 million each (not included inc
Slide 5: Karowe Underground Expansion
Karowe Underground Expansion Extending Mine-life to at least 2040 $534 million underground expansion adds ~ $4 billion additional net revenue NPV $1,280 million/$750 million (pre/post tax) @ 5%; using conservative diamond price assumptions Financing Completed, Full Board Sanction Received One drawdo
Slide 6: Karowe Underground Expansion
Karowe Underground Expansion 10-039 Winder Building 2021 Activities • Over 1,000,000 hours LTI free on project by year end • $86.3 million spent • Clearing for and construction of 40/88 tower foundations for the 29 km 132kV transmission line bulk power upgrade • Mobilization of headframe materials a
Slide 7: Sales Channels
Sales Channels Optimized Sales of Rough and Polished Diamonds to Create Alignment Along the Supply Chain and Maximize Revenues Rough Clara Polished Jewelry Increasing Margin Capture Downstream Tenders (Auctions) of Proprietary Digital Manufacturing into Collaboration with Rough Diamonds < 10.8 Marke
Slide 8: Clara - Transforming the Diamond Sales Process
Clara - Transforming the Diamond Sales Process De-Risked Digital sales platform (1 to 15 carats) expected to capture at least 10% of the global rough diamond market over the next 5 years Opportunity to disrupt the existing supply Matched chain, driving efficiencies and unlocking value to buyer Rough
Slide 9: Clara growth profile and sales completed
Clara 5 Year Potential Growth Profile 60 sales completed Growth Potential in Primary 100 2000 since inception & Secondary Markets ~$50 million 90 1800 Buyers increased from of diamonds sold by value 75 to 88 in 2021: 80 1600 through the platform Wait-list being maintained Revenue (US$mln) 70 1400 Vo
Slide 10: Supply Agreement with HB Antwerp
Supply Agreement with HB Antwerp 2021 All +10.8 carat diamonds produced from Karowe sold through novel supply agreement until at least 2023 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 ac
Slide 11: Louis Vuitton & HB Collaboration Agreements on the Sethunya & Sewelô
Louis Vuitton & HB Collaboration Agreements on the Sethunya & Sewelô Luxury Brand & Cutting Edge Manufacturing Alignment across the supply chain to maximize polished diamond value for all 549 ct Lucara participates in all sales of polished Sethunya diamonds resulting from the Sethunya and 50% of pol
Slide 12: Diamond Market
Diamond Market Restocking activity in the midstream late 2020, continues in 2021 driving better prices; Longer term outlook remains strong supported 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 202
Slide 13: Quarterly Aggregated Rough Diamond Price Indexed
Quarterly Aggregated Rough Diamond Price Indexed Zimnisky Global Rough Diamond Price Index Starting value 100 in December 2007 As of February 2022 230 New all-time high 200 Previous all-time high 170 Oversupplied market Support line 140 Chinese market weakness Covid-19 pandemic 110 80 Global financi
Slide 14: US Jewelry Sales Hit Record Growth
US Jewelry Sales Hit Record Growth YoY Change in US Annual Jewelry Sales 60% 51.8 50% % 40% 30% 20% 10% 0% -10% -20% Source: Department of Commerce 14
Slide 15: Q4 2021 Financial Highlights
Q4 2021 Financial Highlights Three months ending December 31, 2021 (All currency figures in U.S. Dollars) Revenue (millions) Adjusted EBITDA(1) (millions) $57.9 $21.1 $42.4 $10.2 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Net income (loss) (millions) Average Price ($/Carat) Cash flow from operations per share
Slide 16: 2021 Financial Highlights
2021 Financial Highlights Year ending December 31, 2021 (All currency figures in U.S. Dollars) Average Price (Average $/Carat) Operating Cost ($ per tonne processed)(1) Cash flow from operations per share(1) $603 $30.02 $0.24 $27.80 $335 $0.04 2021 2020 2021 2020 2021 2020 Revenue (millions) Adjuste
Slide 17: Q4 2021 Operational Highlights – Karowe Mine
Q4 2021 Operational Highlights – Karowe Mine Three months ending December 31, 2021 (All currency figures in U.S. Dollars) Ore mined (tonnes) Ore processed (tonnes) 748,296 705,877 684,768 610,072 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Carats recovered (carats) Carats sold (carats) Operating expense per car
Slide 18: 2021 Operational Highlights – Karowe Mine
2021 Operational Highlights – Karowe Mine Year ending December 31, 2021 (All currency figures in U.S. Dollars) Ore mined (tonnes) Ore processed (tonnes) 3,668,677 2,844,888 2,676,066 2,987,775 2021 2020 2021 2020 Carats recovered (carats) Carats sold (carats) Operating expense per carat sold 380,493
Slide 19: Sales Channels 2021
Sales Channels 2021 Sales through Clara, HB and Tenders • All gem quality Specials (+10.8 carat diamonds) are sold through HB; • Diamonds between 1 and 15 carats that meet specific requirements are sold through Clara; Specials not sold through HB and diamonds less than 10.8 carats which are not extr
Slide 20: 2022 Guidance
2022 Guidance (All currency figures in U.S. Dollars) Karowe Diamond Mine FY2022 Diamond revenue1 $195 to $ 225 million Diamond sales 300,000 to 340,000 carats Diamonds recovered 300,000 to 340,000 carats Ore tonnes mined 3.1 to 3.5 million Waste tonnes mined 1.5 to 2.1 million Ore tonnes processed 2
Slide 21: Approach to Sustainability
Approach to Sustainability Focused on transparency, the protection of our people and stakeholder engagement Lucara is certified by the Code of Business Conduct Responsible Jewellery Council Lucara’s Sustainability Report is and Ethics (RJC), compliant with the prepared in accordance with the GRI Whi
Slide 22: COVID-19 Response
COVID-19 Response Operations consistent, Diamond sales continue Measures and guidelines implemented by the Government of Botswana in late March 2020 have allowed the Karowe Mine to remain fully operational throughout the pandemic. These measures designated mining as an essential service in Botswana
Slide 23: Lucara Diamond: Three Reasons to Buy
Lucara Diamond: Three Reasons to Buy A Premium Diamond Equity De-Risked and Positioned for Long-Term Growth Diamonds Diamond market fundamentals are the best LUC: TSX Feb 22, 2022 they’ve been in the last five years Share Price C$0.63 Market Cap1 $229.5 M Lucara Shares Outstanding2 465,495,709 Proli
Slide 24: 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