Lucara Diamond Corp. · TSX:LUC
Lucara Diamond — The Ton Private Family Office Event (March 2020)
23 slides from Lucara Diamond's conference presentation, Mar 5, 2020
Slide 1: The Ton
The Ton Private Family Office Event MARCH 5, 2020 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: Karowe Diamond Mine
Botswana KAROWE DIAMOND MINE 3
Slide 4: Highlights
High operating margin Total capital investment less than 2.64 million (>60% LOM) US$200 million carats sold sustained since production began in 2012 US$271 million US$1.49 billion in dividends paid since 2014 in revenue in under 7 years Consistent recovery of high value Top of Class, only mine in In
Slide 5: 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 Sold for a record gem diamond ever recovered US$63.1 million in the world 5
Slide 6: Lesedi La Rona & Constellation
Lesedi La Rona & Constellation The 1,109 carat Lesedi La Graded by the GIA, one of Rona was recovered in 2015 the world’s largest square and purchased by Graff in emerald cut diamond; 66 satellite 2017 for US$53 million diamonds were also resulting in the 302.37 carat cut ranging from <1 carat Graff
Slide 7: 2019 Highlights
2019 Highlights (All currency figures in U.S. Dollars, unless otherwise stated) Karowe Diamond Mine Clara Diamond Solutions Strong Balance Sheet & (100%) (100%) Dividend Policy Change Strong, stable operations; met or Fifteen sales completed for $22.4 million in dividends paid exceeded guidance on a
Slide 8: Sewelô Collaboration with Louis Vuitton
Sewelô Collaboration with Louis Vuitton Botswana’s Largest Diamond Sewelô “rare find”, an unbroken 1,758 carat near gem quality diamond recovered in April 2019 Collaboration between Lucara (50%), Louis Vuitton (25%), HB Company (25%) – planning, cutting and polishing a collection of diamonds from Se
Slide 9: Record Recoveries
Record Recoveries 549 carat diamond recovered Recovered unbroken from the MDR (Mega Diamond Recovery) XRT circuit A diamond of exceptional purity Recovered from direct milling ore sourced from the EM/PK(S) unit of the South Lobe Follows the recent recovery of a gem quality 176 carat stone from the s
Slide 10: Consistent Recovery of Large Diamonds
Consistent Recovery of Large Diamonds Specials contribute ~70% by revenue and ~5% by volume Revenue and production includes 2015 to 2019 Life of mine recovery of Since 2012: 15 diamonds in 10 diamonds sold for > US$ 10 157,000 carats of individual excess of 300 carats have million each (not included
Slide 11: Global Achieved Average Diamond Prices
Global Achieved Average Diamond Prices 2018/2019 (All figures in U.S. Dollars per carat) $2,131 $1,637 Lucara’s Average price ~4x Global Average $502 $468 $105 $79 $121 $122 $164 $133 $75 $73 $74 $63 2018 2019 2019 Median 11
Slide 12: Diamond Market
Diamond Market Long term fundamentals strong but pricing environment has been challenged; Evidence of market stability Rough diamond supply and demand Optimistic Demand 25 20 Base Demand Optimistic Supply 15 Base Supply 10 5 2000 2005 2010 2015 2020F 2025F 2030F Millennials will be the 2000‐2030: 20
Slide 13: 2019 Financial & Operational Highlights
2019 Financial & Operational Highlights Full Year ending December 31, 2019 (All currency figures in U.S. Dollars) Revenue (millions) Adjusted EBITDA(1) (millions) Average price ($/Carat)(1) $73.1 $502 $192.5 $60.5 $468 $176.2 Full Year 2018 Full Year 2019 Full Year 2018 Full Year 2019 Full Year 2018
Slide 14: 2020 Outlook
2020 Outlook (All currency figures in U.S. Dollars) $180 – $210 million 3.5 – 3.9 Million $32 – $36 per tonne Diamond Revenue Ore Tonnes Mined of ore processed Operating Cash Cost 350,000 – 390,000 2.5 – 2.8 million Diamond Sales (Carats) Ore Tonnes Processed 342 ct 370,000 – 410,000 3.6 – 4.2 milli
Slide 15: Karowe Underground
Karowe Underground Extending Mine-life to 2040 Doubles mine life from original 2010 Feasibility Study Capex US $514 M; Payback 2.8 yrs Adds ~ US$4 billion in additional net revenue NPV $1,266 million/$718 million (pre/post tax@ 5%) $2.2 billion / $1.2 billion Cash Flow (pre/post tax) +US$200 million
Slide 16: Underground Mine Design
Underground Mine Design Long hole shrinkage Trade off assessed block cave, sub level cave, and assisted block cave Capacity 2.6 mtpa from UG mining Geotechnical testing results did not support caving Life 13-year UG production or caving with preconditioning Higher value ore lies deeper and is attrib
Slide 17: Karowe Underground Mine Design
Karowe Underground Mine Design Prod. Shaft (767 m deep) Vent. Shaft (717 m deep) Final Pit 680 Level 580 Level Total development: 16,300 m lateral 2,800 m vertical 480 Level 380 Level 310 Level 17
Slide 18: Karowe Underground Next Steps
Karowe Underground Next Steps Based on the assumptions In the first half of The Company will also be The anticipated capitalrequirements used for this evaluation,the project shows 2020 reviewing in 2020 represent the Company will focus on financing options less than 10% positive detailed engineering
Slide 19: Transforming the Diamond Sales Process
Transforming the Diamond Sales Process Using Innovation and Technology Opportunity to disrupt the existing supply Matched chain, driving efficiencies and unlocking value to buyer Rough diamonds are sold stone by stone based on polished demand Scan/ID Transparent supply chain for Diamond provenance i
Slide 20: Clara
Clara Clara sales platform 19 sales completed Manufacturers on with ~US$11 million the platform have grown of diamonds sold by value from 4 to 32 customers through the platform Nineteen sales between December 2018 and February 2020 Focus on growing supply and POSITIVE RESULTS demand concurrently thr
Slide 21: Sustainability
Sustainability Mokubilo Farm Initiative Community focused initiative to generate, broad based sustainable income Lucara’s Sustainability Report is prepared In 2018, Lucara became a UN GC participant Lucara is certified by the Responsible in accordance with the GRI Standards: and contributes to 10 of
Slide 22: Conclusions
Conclusions Lucara is a premier, mid-tier, investible diamond company, positioned for long term, sustainable growth High margin diamond producer Botswana - a low risk jurisdiction 813 ct Strong balance sheet Open pit mineable reserves to 2026, Underground reserves will double the mine life to 2040 A
Slide 23: 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.TSX | LUC.XSTO | LUC.BSE
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