Lucara Diamond Corp. · TSX:LUC
Lucara Diamond — Q3 2015 Earnings Presentation
23 slides from Lucara Diamond's earnings presentation, 2015
Slide 1: Where Bigger Is
Where Bigger Is Q3 2015
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, r
Slide 3: Lucara – The Investment Case
Lucara – The Investment Case Where Bigger Is™ 100% owned Karowe Diamond Mine in Botswana – one of the ✔ foremost producers of Type IIa diamonds in the world 8.0 carat fancy pink diamond Consistent delivery of large and exceptional stones generating ✔ strong free cashflow Regular dividend initiated i
Slide 4: Lucara 2015 Guidance
9.46 carat blue diamond sold for $477,272 per carat Lucara 2015 Guidance Karowe • Forecast 2015 revenues of $200 - $220 million • Diamond sales of between 350,000 - 400,000 carats • Operating costs of $33 - $36 per tonne processed • Capital expenditure of up to $20 million (plant optimization projec
Slide 5: Capital Structure
Capital Structure • Lucara is a public Company listed under the symbol “LUC” • TSX Financial Summary – 3 Year Performance • NASDAQ OMX (Sweden) $300 Millions • BSE (Botswana) Revenue (US$) EBITDA (US$) Free Cashflow (US$) $266 Free Cashflow Margin $250 • Issued share 379M $200 $181 $173 • Fully dilu
Slide 6: Focused on Southern Africa
Focused on Southern Africa Karowe Mine Boteti Exploration 100% Owned Block A & E Production BK 02, AK 11, 12, 13 and 14 Mothae Project 75% Owned Divestment 6
Slide 7: The Karowe Mine - Botswana
~ YY The Karowe Mine - Botswana
Slide 8: Geological Model
Geological Model Plan view of geological model North Central South CKIMB(N) North North “gap” “gap” 1000masl WK(N) WK(S) WBBX(S) WK(C) WKBBX(N) “gap” CFK(C) 900 WKBBX(N) WKBBX(N) BBX(S) BBX(N) CKIMB(C) BBX(C) Central Central 800 M/PK(S) FK(N) FK(C) 700 South South CBBX(S) IntBas(S) 600 Indicated 520
Slide 9: Resource
Resource • Large diamonds continue to be recovered across the surface area of the AK6 kimberlites and at depth 126/84cts 289cts 135cts 238cts 107\109/133/106cts 257cts 88cts 60cts 138cts 80cts 86cts 155cts 171ts 104/117/91cts 74cts 125cts 167cts 134cts 165cts 156cts 281cts 134cts 134cts 336cts 129ct
Slide 10: Resource Performance
Resource Performance • Resource continues to deliver significant quantities of stones greater than 10.8cts with greater than 815 being recovered during 2014 at an average stone size of 29.1ct/stone • To end Q3, 2015 a total of 474 diamonds greater than 10.8 carats were recovered at an average stone
Slide 11: Sales Update
Sales Update • To end Q3, 2015, 283,110 carats of diamond were sold for gross proceeds of $158.6 million or $560 per carat. • Exceptional Stone Tenders: • July, 2015 – $68.7 million ($41,029/ct) • Nov, 2015 ‐ $29.7 million ($20,625/ct) Lucara Exceptional Stone Sales (with values greater than $250,00
Slide 12: Karowe Operating Performance
Karowe Operating Performance Adjusted Net Income Operating Earnings Variance (millions) (millions) Q3 2015 Q3 2014 ‐19% ‐23% % $72.8 $137.6 Mining and Process $58.9 $105.5 Ore processed (t) 1,671,008 1,854,825 ‐10% Carats recovered (cts) 276,443 316,341 ‐13% Plant feed grade (cpht) 16.5 17.1 ‐4% Was
Slide 13: Botswana Exploration
Botswana Exploration 13
Slide 14: Resource Replacement
Resource Replacement Prospecting Licenses • Boteti awarded 2 PL’s in mid- Sept 2014 • Both PL’s host known diamondiferous kimberlites • Block A (BK02) • Block E (AK11,12,13,14) 14
Slide 15: Prospecting License: Block A – BK 02
Prospecting License : Block A – BK 02 Background • License area is 1.07km2, BK02 was discovered in 1967 during regional exploration by De Beers, one of first discoveries in Orapa District, located 30km from Karowe • Surface area of 2.4ha, outcrops, with local thin sand and calcrete cover • Previous
Slide 16: Prospecting License: Block E – AK 11,12,13,14
Prospecting License : Block E – AK 11,12,13,14 Background • License area is 55.4km2, host up to 4 known kimberlites, potential for additional discoveries, northern edge is contiguous with Debswana Orapa Mine Lease. Excellent road access, 15 kilometers north of Karowe Mine • AK11 is poorly constraine
Slide 17: Lucara – A Summary
135.38 carat diamond sold for $47,028 per carat Lucara – A Summary Lucara • 100% owned Karowe Diamond Mine • Strong free cashflow generation from operations which is enhanced by the consistent recovery of large and exceptional Type IIa diamonds • Growth potential through exploration and M&A (strong
Slide 18: Contact Information
Contact Information Ph. 604‐689‐7842 lucara@namdo.com Phone and Fax Email and Web Address Suite 2000 885 West Georgia St. Fx. 604‐689‐4250 Vancouver, B.C. www.lucaradiamond.com Canada V6C 3E8 18
Slide 19: The Diamond Market
The Diamond Market The Diamond Sector – Supply/Demand • Zimbabwe already in decline • Grib pipe now ramping up • SWY, MPV, FDI – delivering in 2016 • Production static for short term Bain & Company – The Global Diamond Report 2014 19
Slide 20: The Diamond Market
The Diamond Market Global Rough Diamond Production Production declined significantly during the crisis and volumes have yet to recover Annual production ‐ Carats 200 Millions 176 176 180 168 163 Botswana 159 160 DRC 140 133 South Africa 128 130 120 122 124 Angola 120 Zimbabwe 100 Russia Australia 80
Slide 21: The Diamond Market
The Diamond Market Expected New Mine Production New mines are expected to add 18 million carats a year by 2023 Bain & Company – The Global Diamond Report 2013 21
Slide 22: The Diamond Market
The Diamond Market Rough Diamond Demand (2012 – 2023) Driven by India and China and is expected to reach $26 billion Primary demand increase Bain & Company – The Global Diamond Report 2013 22
Slide 23: The Diamond Market
The Diamond Market Annual Diamond Jewelry Sales Global Rough Diamond Production $68.5B $73.1 $64.8B $58.7B $60.2B $70.8B $72.1B $74.6B 2008 – 2013 +15% CAGR 2008 – 2013 +17% CAGR $20,000 100 Millions $18,000 $16,000 80 $14,000 $12,000 60 $10,000 $8,000 40 $6,000 $4,000 20 $2,000 $0 0 2008 2009 2010