Lucara Diamond Corp. · TSX:LUC
Lucara Diamond — Shareholder Meeting (2017)
33 slides from Lucara Diamond's shareholder meeting presentation, 2017
Slide 1: 2017 AGM Presentation
Nis Lucara Diamond 2017 AGM Presentation
Slide 2: Cautionary Statement
Cautionary Statement Forward‐looking information • This investor presentation contains forward‐looking statements and information as defined in applicable securities laws including: the estimates of the Company’s mineral reserve and resources; estimates of the Company’s production and sales volumes,
Slide 3: Content
Content Introduction Highlights & Key Karowe Mine Exploration Performance Data 4 8 16 23 2017 Guidance The Diamond Market 26 29 3
Slide 4: Introduction
Introduction Lucara is an established diamond producer. Its principal asset is the Karowe Mine in Botswana. The 100 percent owned Karowe Mine is a state-of-the-art mine which has consistently delivered large, Type IIA stones. The Company has an experienced board and management team with extensive di
Slide 5: The Investment Case
The Investment Case • 100% owned Karowe Mine in Botswana • One of the foremost producers of large Type IIa diamonds • Consistent delivery of large and exceptional stones supporting strong free cash flow • 131 diamonds > US$1.0M (exclusive of EST 11) • 93,400 carats of diamonds > 10.8ct recovered sin
Slide 6: Capital Structure
Capital Structure Lucara is a publicly listed company trading under the symbol “LUC” TSX NASDAQ Sweden BSE (Botswana) Issued shares 382,446,001 Fully diluted shares 387,814,588 Insider Holdings 21% on a fully diluted basis Debt Nil Cash on hand US$ 43.5 million (Q1 2017) $50 million Credit Facility
Slide 7: TSX: Five Year Stock Chart
Ne = TSX: Five Year Stock Chart Lucara Diamond Historic Chart for Cdn:LUC by Stockwatch.com 604.687.1500 - (c) 2017 Wed May 10 2017 Op=3.25 Hi=3.27 Lo=3.17_ Cl=3.175 Vol=598.485 Year hi=4.39_lo=0.49 Cdn:LUC 4.20 4.00 3.80 3.60 3.40 3.20 3.00 2.80 2.60 2.40 2.20 2.00 1.80 1.60 1.40 1.20 1.00 0.80 0.6
Slide 8: Highlights & Key Performance Data
Highlights & Key Performance Data
Slide 9: 2016 Full Year Highlights
2016 Full Year Highlights • Strong demand for Karowe diamonds • Revenue for the year was $295.5 million or $824 per carat (2015: $223.8 million or $593 per carat) • Robust cash generation • Cash generated from operations (post tax) of $103 million. Increase of 21% compared to 2015. • Operating cost
Slide 10: 2016 Key Performance Indicators
2016 Key Performance Indicators Revenue EBITDA Net Income (millions) (millions) (millions) $185.4 $295.5 $77.8 $133.9 $70.7 $223.8 2016 2015 2016 2015 2016 2015 Total Sales EBITDA Margin Earnings per share (average dollar per carat) 63% 60% $824 $0.21 $0.19 $593 *$649 2016 2015 2016 2015 2016 2015 *
Slide 11: Historical Revenue Performance
Historical Revenue Performance $100,000 $90,000 $80,000 $265M $70,000 $232M (*) $224M Revenue (USD 000’s) Revenue USD(,000) $60,000 $181M $50,000 EST $40,000 Regular $30,000 $20,000 $10,000 $0 (*) Q2 2016 and Full Year 2016 exclude the sale of the Constellation diamond for $63.1 million 11
Slide 12: Karowe vs. World Production (est.)
Karowe vs. World Production (est.) Carat Production Profile Revenue Profile 100% 5% 90% 80% 70% 47% 60% 79% +10.8ct 50% +2ct +.1 40% <.1 30% 47% 20% 27% 10% 11% 2% 0% World Ct* Luc Ct World Revene* Luc Revenue *world revenue and ct proportions estimated 12
Slide 13: Consistent Recovery of Specials
Consistent Recovery of Specials Karowe +10.8 ct Diamonds Cumulative % of Annual Production 8% 7% 2013 2014 2015 2016 Cumulative Wt. % 6% 5% 4% 3% 2% 1% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month 13
Slide 14: Strong Financial Position
Strong Financial Position • Robust net cash balance of $43.5 million (Q1 2017). Cash-on-hand • Fundamentals in place to deliver 2017 cash flow (millions) returns: $134.8 • Exceptional Stone Tender closed on May 11th adding to above cash balance • Project costs and operating costs well controlled and
Slide 15: Shareholder Returns
Shareholder Returns Regular Dividend Per Share Growth in Regular Dividend Payments Dividend 67% Yield 3.2%* 50% Dividend Yield 2.8%* Dividend Yield Dividend 2.4%* Yield 2.0%* C$0.10/share C$0.06/share C$0.04/share C$0.04/share 2017 2016 2015 2014 2017 2016 2015 *Share price beginning of year • Stron
Slide 16: Karowe Mine
Karowe Mine
Slide 17: Operating Performance For 2016
Operating Performance For 2016 Production Information 2016 2015 Ore processed (tonnes) 2,613,217 2,238,974 Ore mined (tonnes) 2,722,375 3,187,222 Carats recovered (carats) 353,974 365,690 Plant feed grade (carats per hundred tonnes) 13.5 16.3 Waste mined (tonnes) 11,058,041 13,890,115 Revenues and O
Slide 18: Karowe Mine Site
Karowe Mine Site MDR Circuit SUB-MIDDLES XRT 18
Slide 19: Mega Diamond Recovery Circuit
Mega Diamond Recovery Circuit • Placed directly after the Primary Crusher • Will allow for the recovery of diamonds between 200 carats to 5,000 carats • Reduces the amount of ore going to the DMS Plant providing for reduction in processing costs MDR 19
Slide 20: Sub-Middles XRT Circuit
Sub-Middles XRT Circuit • Placed after the Large Diamond Recovery circuit • Targets the recovery of diamonds sized between 4mm and 8mm • Provides for the most efficient and cost effective processing of the dense high‐yielding South Lobe ore at depth 20
Slide 21: Safety Highlights
Safety Highlights • Karowe achieved 5 million Loss Time Injury (LTI) free hours in January 2017, a total of more than 2 years of LTI free operation • Karowe had one lost time injury during the Q1 2017 resulting in a twelve month rolling Lost Time Injuries Frequency Rate (“LTIFR”) of 0.08 21
Slide 22: Corporate Social Responsibility
Corporate Social Responsibility • Karowe Emerging Entrepreneur Fund (micro‐loan program) has funded over 10 businesses to date. The program ensures sustainable community development • Recipient of the 2016 PDAC Environment and Social Responsibility Award 22
Slide 23: Exploration
Exploration
Slide 24: AK06 Resource Expansion
AK06 Resource Expansion • 10,000 metre drill program with target South Lobe Centre Lobe North Lobe to bring inferred mineral resources into the indicated category Existing pierce point • Drilling program completed in February 2017 Plan View of Geological Model CKIMB(N)North “gap” WKBBX(N) CKIMB(C) C
Slide 25: Botswana Exploration Targets
Botswana Exploration Targets BK02: Due to the observed average price per carat for the combined parcel of US$56.76 per carat and a relatively low recovered sample grade, no further work is planned at this time AK11: Logging and sampling of the drill core is complete and microdiamond samples are curr
Slide 26: 2017 Guidance
WL Naf al ELicata Diamond 2017 Guidance
Slide 27: 2017 Outlook
2017 Outlook Revenue (US$ million) – excluding sale of the Lesedi La Rona 200 – 220 Sales (thousand carats) 290 – 310 Tonnes of ore processed (million tonnes) 2.2 – 2.5 Ore mined (million tonnes) 2.4 – 2.7 Waste mined (million tonnes) 17.0 –20.0 Operating cash costs per tonne ore processed (dollars)
Slide 28: Investment Highlights
Investment Highlights • Operating in Botswana which is a geopolitically stable jurisdiction • Mine and projects are located in the established Orapa‐Letlhakane mining district • Karowe has produced an extraordinary number of large gem quality Type IIa diamonds: • Exceptional Stone Tenders account fo
Slide 29: The Diamond Market
+ : ‘ - aw a My Pe ee” am The Diamond Market a ae
Slide 30: 2017 Diamond Market
2017 Diamond Market • Market is cautious – supply and demand fundamentals remain unbalanced • Retail sales in China appear to be improving, specifically in the smaller goods • Large volumes of rough continue to be sold by the majors with a strong rebound in the price of rough in the categories where
Slide 31: Rough Diamond Price Trend
Rough Diamond Price Trend The historical long‐term price trend is positive; short‐term prices are stabilizing 31
Slide 32: Global Rough Diamond Production
Global Rough Diamond Production Annual rough‐diamond production has been stable since 2010 at approx. 130 million carats (70% gem quality) 32
Slide 33: Contact Information
Contact Information Suite 2000 885 West Georgia St. Vancouver, BC V6C 3E8 Tel: 604 689 7872 Fax: 604 689 4250 info@lucaradiamond.com lucaradiamond.com 33