Lucara Diamond Corp. · TSX:LUC
Lucara Diamond — Q2 2023 Earnings Presentation
29 slides from Lucara Diamond's earnings presentation, Aug 10, 2023
Slide 1: Q2 2023 Results Conference Call
Q2 2023 Results Conference Call AUGUST 10, 2023 LucaraDiamond.com | LUC.TSX | LUC.XSTO | LUC.BSE
Slide 2: Cautionary Statement
Cautionary Statement Forward‐looking information Certain of the statements made and contained herein and elsewhere constitute forward-looking statements as defined in There can be no assurance that such forward looking statements will prove to be accurate, as applicable securities laws. Generally, t
Slide 3: Q2 2023 Highlights
Q2 2023 Highlights (All currency figures in U.S. Dollars, unless otherwise stated) Revenues $41.1 million; 6.6% Specials (+10.8 carats) Long term market Karowe UGP grouting Adjusted EBITDA1 of by weight fundamentals remain programs and shaft sinking $15.7 million Including 13 stones >100 positive co
Slide 4: Q2 2023 Operational Highlights – Karowe Mine
Q2 2023 Operational Highlights – Karowe Mine Three months ending June 30, 2023 (All currency figures in U.S. Dollars) Ore mined (tonnes) Ore processed (tonnes) 1,091,192 720,345 719,207 682,636 Q2 2023 Q2 2022 Q2 2023 Q2 2022 Carats recovered (carats) Carats sold (carats) Operating cost per tonne of
Slide 5: Q2 2023 Financial Highlights
Q2 2023 Financial Highlights Three months ending June 30, 2023 (All currency figures in U.S. Dollars) Revenue (millions) Adjusted EBITDA(1) (millions) $52.3 $24.4 $41.1 $15.7 Q2 2023 Q2 2022 Q2 2023 Q2 2022 Net income (millions) Operating cash flow before working Operating cash flow per share(1) cap
Slide 6: H1 2023 Operational Highlights – Karowe Mine
H1 2023 Operational Highlights – Karowe Mine Six months ending June 30, 2023 (All currency figures in U.S. Dollars) Ore mined (tonnes) Ore processed (tonnes) 1,903,139 1,421,023 1,385,695 1,224,036 H1 2023 H1 2022 H1 2023 H1 2022 Carats recovered (carats) Carats sold (carats) Operating cost per tonn
Slide 7: H1 2023 Financial Highlights
H1 2023 Financial Highlights Six months ending June 30, 2023 (All currency figures in U.S. Dollars) Revenue (millions) Adjusted EBITDA(1) (millions) $120.5 $60.4 $83.9 $31.1 H1 2023 H1 2022 H1 2023 H1 2022 Net income (millions) Operating cash flow before working Operating cash flow per share(1) capi
Slide 8: Sales Channels Q2 2023 – Karowe Mine
Sales Channels Q2 2023 – Karowe Mine Sales through HB Antwerp, Clara, and Quarterly Tender • High value Specials (+10.8 carats) are manufactured and sold as polished through the HB Antwerp supply agreement. • Diamonds between 1 and 10 carats that meet specific criteria are sold through Clara. • All
Slide 9: 2023 Annual Guidance – No Changes in Q2
2023 Annual Guidance – No Changes in Q2 (All currency figures in U.S. Dollars) Karowe Diamond Mine FY2023 Diamond revenue1 $200 to $ 230 million Diamond sales 385,000 to 415,000 carats Diamonds recovered 395,000 to 425,000 carats Ore tonnes mined 1.9 to 2.3 million Waste tonnes mined 2.2 to 2.8 mill
Slide 10: Recovery of 1,080 carat Type IIa diamond
Recovery of 1,080 carat Type IIa diamond The fourth diamond in excess of 1,000 carats from Karowe since 2015 Lucara announced the recovery of a 1,080.1 carat diamond on August 8, 2023. The diamond, measuring 82.2 x 42.8 x 34.2mm is described as a Type IIa top white gem of high quality, recovered in
Slide 11: Consistent Recovery of Large Diamonds
Consistent Recovery of Large Diamonds Specials contribute ~60-70% by revenue and ~5-7% by volume historically Since 2012: 32 diamonds in excess of 300 carats have Karowe Cumulative Specials (ct) been recovered, including 4 30000 diamonds > 1,000ct 25000 Cumulative Carats +10.8 Over 11 diamonds sold
Slide 12: Q2 2023 Recovered Specials
Q2 2023 Recovered Specials Highlights 13 stones greater than 100cts ✓ 162 recovered specials ✓ 88% of carats recovered coming from the South Lobe ✓ 6.6 wt.% of production ✓ 12% recovered from the Centre Lobe 127.95 carats 296.16 carats 268.19 carats 133.02 carats 92.10 carats 12
Slide 13: Sales Channels – Q2 2023 Results
Sales Channels – Q2 2023 Results Optimized Sales of Rough and Polished Diamonds to Create Alignment Along the Supply Chain and Maximize Revenues Rough Clara Polished Jewellery Increasing Margin Capture Downstream Tenders (Auctions) of Proprietary Digital Manufacturing into Collaboration with Rough D
Slide 14: Supply Agreement with HB Antwerp
Supply Agreement with HB Antwerp High Value +10.8 Carat “Specials” Only Initial price is based on an estimated polished outcome, determined through state-of-the-art scanning and planning technology, with an adjustment for actual achieved polished sales, less a fee and cost of manufacturing Regular c
Slide 15: Clara: sales completed and third-party supply
$5.7 million transacted in Q2 2023 85 sales completed Continuing to add third-party supply; 48% of goods from third-party sources ~$98 million sold by value Growth Potential in Primary & Secondary Markets ~53,000 carats sold by weight Scalable business solution for the industry Low operating cost Ka
Slide 16: Karowe Underground Expansion Update
Karowe Underground Expansion Update Extending mine-life to at least 2040 Updated budget and schedule announced July 2023; Forecast of costs at completion is $683 million; Extension to construction period, with anticipated commencement of production in H1 2028 Sufficient surface stockpiles available
Slide 17: Karowe Underground Expansion Q2 2023 Highlights
Karowe Underground Expansion Q2 2023 Highlights • Activities during the quarter included: o Grouting programs were executed in both shafts o In April, 30 metres of vertical advance in the ventilation shaft was completed, followed by grouting. Sinking resumed in July 2023, 8 days ahead of schedule. o
Slide 18: Material Mined (tonnes)
Total blended mine and mill feed from underground 3,500,000 3,000,000 Material Mined (tonnes) 2,500,000 2,000,000 1,500,000 1,000,000 500,000 - 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 Reserve Mined - UG Reserve Mined - OP Reserve Rehandled
Slide 19: Material Milled (tonnes)
Total blended mine and mill feed from underground 3,500,000 175 3,000,000 150 Material Milled (tonnes) Value / Tonne ($/t) 2,500,000 125 2,000,000 100 1,500,000 75 1,000,000 50 500,000 25 - 0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 UG-South
Slide 20: Carats produced
Expected carats produced 600,000 500,000 Carats produced 400,000 300,000 200,000 100,000 - 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 North Centre South- EMPKS South - MPKS Life of Mine 20
Slide 21: Updated Capital Costs
Updated Capital Costs (All currency figures in U.S. Dollars, millions) Karowe UGP Pre- Total Pre- Capital Costs Incurred Sustaining / Production Production Closure Mining and bulk earthworks 158 253 411 48 Process Plant - - - 96 Tailings (CRD and FRD) - - - 43 Infrastructure, Buildings & Facilities
Slide 22: Karowe Underground Expansion – Pre-tax cash flow
Karowe Underground Expansion – Pre-tax cash flow Karowe UGP Pre-tax cash flow 300 2,500 250 2,000 Cumulative CF US$M 200 1,500 Annual CF US$M 150 1,000 100 500 50 0 0 (50) (500) Annual Pre-Tax Cash Flow Cumulative Pre-Tax Cash Flow The pre-tax cash flow model has been updated to estimate annual cash
Slide 23: Karowe Underground Expansion – Post-tax cash flow
Karowe Underground Expansion – Post-tax cash flow Karowe UGP Post-tax cash flow 200 1,400 1,200 150 1,000 Cumulative CF US$M 800 Annual CF US$M 100 600 400 50 200 0 0 (200) (50) (400) Annual After-Tax Cash Flow Cumulative After-Tax Cash Flow The after-tax cash flow model has been updated to estimate
Slide 24: LOM summary
LOM summary Table outlines the LOM summary and is the basis for the economic analysis. Parameter* Unit Value Ore Processed Mt 51.9 Mill Average Daily Production kt/d 7.4 Mill Average Annual Production Mt 2.7 Average Processing Grade cpht 13.09 Diamonds Recovered k carats 6,788 Initial Capital Cost**
Slide 25: Karowe Underground Expansion – Construction Schedule
Karowe Underground Expansion – Construction Schedule Anticipated commencement of production in H1 2028 2023 2024 2025 2026 2027 2028 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 Production Shaft Sink Infrastructure Ventilation Shaft Sink Underground Construction Infrastructure UG Development Extraction Level
Slide 26: Approach to Sustainability
Approach to Sustainability Focused on transparency, the protection of our people, and stakeholder engagement ✓ Two and a half years ✓ Global Industry Standards ✓ Certified by the Responsible Jewellery without a lost time injury Tailing Management Council (RJC), compliant with the ✓ No reportable ✓ T
Slide 27: Community Impact
Community Impact Karowe Village Initiatives Community engagement ✓ Community-ownership and governance, with ✓ Hardware store a focus on vulnerable communities ✓ Kolonkwaneng horticultural project – ✓ Investment to develop and further expand handover in Q2 2023 the Mokubilo and Khwee co-operative far
Slide 28: Lucara Investment Rationale
Lucara Investment Rationale A Premium Diamond Equity De-Risked and Positioned for Long-Term Growth DIAMONDS Diamond market fundamentals remain strong, bolstered by global supply declines LUC: TSX – AUGUST 9, 2023 Share Price CA $0.40 Market Cap (millions) CA $181.8 Prolific, high-margin diamond mine
Slide 29: 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