Lucara Diamond Corp. · TSX:LUC
Lucara Diamond — Corporate Update (October 2020)
26 slides from Lucara Diamond's corporate update, October 2020
Slide 1: Corporate Update
Corporate Update OCTOBER 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 (100%)
Botswana KAROWE DIAMOND MINE (100%) 3
Slide 4: High operating margin
High operating margin 2.9 million Total capital investment less than sustained since production carats sold $200 million began in 2012 $1.6 billion $271 million in revenue in ~8 years in dividends paid since 2014 Consistent recovery of high value Innovative design Top of class, only mine in +10.8ct
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 US$63.1 million ever recovered 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; 2017 for US$53 million 66 satellite diamonds were resulting in the 302.37 carat also cut ranging from Graff Lesedi L
Slide 7: Sewelô Collaboration with Louis Vuitton
Sewelô Collaboration with Louis Vuitton Botswana’s Largest Diamond Sewelô “rare find”, an unbroken 1,758 carat near gem quality diamond recovered in April 2019 Collaboration between Lucara (50%), Louis Vuitton (25%), HB Company (25%) – planning, cutting and polishing a collection of diamonds from Se
Slide 8: Record Recoveries
Record Recoveries 549 carat diamond recovered Recovered unbroken from the MDR (Mega Diamond Recovery) XRT circuit A diamond of exceptional purity Recovered from direct milling ore sourced from the EM/PK(S) unit of the South Lobe Followed the recovery of a gem quality 176 carat stone from the same or
Slide 9: Consistent Recovery of Large Diamonds
Consistent Recovery of Large Diamonds Specials contribute ~70% by revenue and ~5% by volume Revenue and production includes 2015 to 2019 Life of mine recovery of Since 2012: 15 diamonds in 10 diamonds sold for > US$ 10 158,000 carats of individual excess of 300 carats have million each (not included
Slide 10: COVID-19 Response
COVID-19 Response Operations Strong and Stable • Botswana Government declared mining an essential service in late March 2020. Guidelines being followed include increased travel restrictions, implementation of social distancing and additional cleaning protocols. • Focus on protecting the health and w
Slide 11: Supply Agreement with HB Group
Supply Agreement with HB Group Groundbreaking Partnership for 2020 All +10.8 carat stones produced from Karowe Mine 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 achieved polished sales, le
Slide 12: Q2 2020 Highlights
Q2 2020 Highlights (All currency figures in U.S. Dollars, unless otherwise stated) Karowe Diamond Mine Clara Diamond Solutions Strong Balance Sheet (100%) (100%) Five sales completed in Q2 Cash and cash equivalents of Continued strong operational results & $13.7 million; Net debt of $5.3 safety perf
Slide 13: H1 2020 Financial & Operational Highlights
H1 2020 Financial & Operational Highlights Six Months ending June 30, 2020 (All currency figures in U.S. Dollars) Carats recovered (carats) Operating Cost ($ per tonne processed)(1) Ore Processed (tonnes) 241,648 $31.16 1,476,350 192,739 $27.14 1,344,851 H1 2019 H1 2020 H1 2019 H1 2020 H1 2019 H1 20
Slide 14: Diamond Market
Diamond Market Evidence of strengthening market late 2019 was interrupted by COVID-19; Longer term outlook remains strong Rough diamond supply and demand 25 20 Optimistic Demand 15 Base Demand Optimistic Supply 10 Base Supply 5 2000 2005 2010 2015 2020F 2025F 2030F Millennials will be the 2000‐2030:
Slide 15: Diamond Prices – Rough Versus Polished
Diamond Prices – Rough Versus Polished Polished Prices Have Outperformed Over the Past Year 15
Slide 16: Karowe Underground
Karowe Underground Extending Mine-life to 2040 UG development will double the mine life from the original 2010 Feasibility Study Resource work completed since November 2017 identified a much larger economic opportunity at depth, on the basis of new drilling and open pit recoveries UG would add ~ $4
Slide 17: Underground Feasibility Key Findings
Underground Feasibility Key Findings (All currency figures in U.S. Dollars) Updated geological resource Long hole shrinkage selected Strong Economics on both confirms increasing value as underground mining stand alone UG and OP+UG with depth method (700-310 masl) scenarios OP &UG Combined: Undergrou
Slide 18: Karowe Production Carats by Source & Value
Karowe Production Carats by Source & Value (All currency figures in U.S. Dollars) UG Carats By Source 2025-39 2019 Carats by Source South Lobe Ore 100% South Lobe Ore 82% 9% 9% 25% 36% Average Price* Average Price* $468/carat $725/carat 64% 57% EM/PK(S) M/PK(S) EM/PK(S) M/PK(S) Centre North *Average
Slide 19: Karowe Underground Next Steps
Karowe Underground Next Steps Based on the assumptions 2020 Plan COVID-19 Response Continue to explore used for this evaluation, the project shows Focus on detailed engineering Push out early surface civil financing options and early site works using local works pending lifting of travel restriction
Slide 20: 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 21: Clara
Clara Clara sales platform 34 sales completed since inception Manufacturers on ~US$17million the platform have grown of diamonds sold by value from 4 to 70 customers through the platform Thirty- four sales between December 2018 and September 2020 Focus on growing supply and POSITIVE RESULTS demand c
Slide 22: 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 23: Total Clarity
Total Clarity The facts on modern diamond mining Total Clarity Report by Trucost examined 150 metrics across the Natural Diamond Council (NDC) members which comprise approximately 75% of the world’s diamond production with global operations including Botswana, Russia, South Africa, Lesotho, Australi
Slide 24: 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 25: Capital Structure
Capital Structure ~C$202M 404.6M LUC (June 2020) Market Cap Fully diluted Shares Lucara is a publicly listed company trading under US$19.0 US$13.7M (June 2020) (June 2020) the symbol “LUC” Working capital facility Cash on hand TSX US$31.0M 396.9M (June 2020) (available) NASDAQ Stockholm Credit Facil
Slide 26: 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