REG - Lucara Diamond Corp - LUC ANNOUNCES EXTENDED DIAMOND SALES AGREEMENT

Lucara DiamondAnnouncement

17/11/2022 07:00

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RNS Number : 6934G  Lucara Diamond Corp  17 November 2022

November 16, 2022

 

PRESS RELEASE

 

LUCARA DIAMOND CORP. ANNOUNCES EXTENDED DIAMOND SALES AGREEMENT WITH HB

 

VANCOUVER, November 16, 2022 - (LUC - TSX, LUC - BSE, LUC - Nasdaq Stockholm)

 

Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to announce today
that it has entered into an extended diamond sales agreement (the "Agreement")
with Lucara Botswana (Proprietary) Limited ("Lucara Botswana"), and HB Trading
BV ("HB"), for the purpose of selling +10.8 carat rough diamonds produced from
Lucara's Karowe mine until December 31, 2032.  Lucara first partnered with HB
in 2020 to sell Karowe's large, high value diamonds, which have historically
accounted for approximately 60% to 70% of Lucara's annual revenues.  The
Agreement extends this arrangement for ten years.

 

Under the Agreement, Lucara's +10.8 carat production is sold at prices based
on the estimated polished outcome of each diamond, determined through
state-of-the-art scanning and planning technology, with a true up paid on
actual achieved polished sales thereafter, less a fee and the cost of
manufacturing. The Agreement is consistent with the terms of the previous
arrangement with HB, with refinements to more accurately reflect how the
parties have been working together.

 

The pricing mechanisms of the Agreement with HB results in complete
transparency within the value chain, creating important alignment between all
participants in the value chain, and delivering regular cash flow at superior
prices for this important segment of our production profile.

 

Eira Thomas, CEO commented, "It has been more than two years since Lucara
initiated this transformational approach to sales of its' highest value
diamonds, working in collaboration with HB to create alignment along the value
chain, differentiating diamonds from Karowe on the basis of provenance,
excellence in manufacturing and a commitment to complete transparency for all
stakeholders.  For the first time in our ten-year history, we have insight on
what becomes of each and every +10.8 carat rough diamond produced from our
mine, participating in each step of the planning and manufacturing process
right through to the final polished sale.  Not only has this approach
stabilized prices for our most valuable production segment, it has
demonstrably grown demand, a core objective.

As one of the world's most important sources of large, high value type IIa
diamonds, our approach provides consumers with complete confidence in the
origin of their diamonds and full insight on how our business is governed,
delivering on our commitments to industry leading, best practice in
responsible mining in Botswana."

 

Oded Mansori, Co-founder and CEO of HB Antwerp said, "Over the past two years,
we have fostered a close partnership with Lucara by providing unprecedented
insight into the diamond value chain, using data and information to align
interests and maximize positive impact. The Lucara - HB agreement reflects the
renewed commitment of both companies to embrace a new approach to sourcing,
transforming, and distributing mineral resources - based on equity,
transparency, and sustainability, providing meaningful benefits to all
participants, including the people and communities of Botswana."

 

Eira Thomas

President and Chief Executive Officer

 

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ABOUT LUCARA

Lucara is a leading independent producer of large exceptional quality Type IIa
diamonds from its 100% owned Karowe Diamond Mine in Botswana. The Karowe Mine
has been in production since 2012 and is the focus of the Company's operations
and development activities. Clara Diamond Solutions Limited Partnership
("Clara"), a wholly-owned subsidiary of Lucara, has developed a secure,
digital sales platform that uses proprietary analytics together with cloud and
blockchain technologies to modernize the existing diamond supply chain,
driving efficiencies, unlocking value and ensuring diamond provenance from
mine to finger.  Lucara has an experienced board and management team with
extensive diamond development and operations expertise.  Lucara and its
subsidiaries operate transparently and in accordance with international best
practices in the areas of sustainability, health and safety, environment, and
community relations.  Lucara has adopted the IFC Performance Standards and
the World Bank Group's Environmental, Health and Safety Guidelines for Mining
(2007).  Accordingly, the development of the Karowe underground expansion
project ("UGP") adheres to the Equator Principles. Lucara is committed to
upholding high standards while striving to deliver long-term economic benefits
to Botswana and the communities in which the Company operates.

 

The information is information that Lucara is obliged to make public pursuant
to the EU Market Abuse Regulation and the Swedish Securities Markets Act. This
information was submitted for publication, through the agency of the contact
person set out above, on November 16, 2022, at 2:00pm Pacific Time.

 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain of the statements made and contained herein and elsewhere constitute
forward-looking statements as defined in applicable securities laws.
Generally, these forward-looking statements can be identified by the use of
forward-looking terminology such as "expects", "anticipates", "believes",
"intends", "estimates", "potential", "possible" and similar expressions, or
statements that events, conditions or results "will", "may", "could" or
"should" occur or be achieved.

 

Forward-looking statements are based on the opinions and estimates of
management as of the date such statements are made, including in respect to
the pricing performance under the Agreement. These assumptions, opinion and
estimates are subject to a number of known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any future
results, performance or achievement expressed or implied by such
forward-looking statements. The Company believes that expectations reflected
in this forward-looking information are reasonable, but no assurance can be
given that these expectations will prove to be accurate and such
forward-looking information included herein should not be unduly relied upon.
In particular, this release may contain forward looking information pertaining
to performance under the Agreement.

 

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-looking information as a
result of those factors discussed in or referred to under the heading "Risks
and Uncertainties" in the Company's most recent Annual Information Form
available at http://www.sedar.com, as well as changes in general business and
economic conditions, changes in interest and foreign currency rates, the
supply and demand for, deliveries of and the level and volatility of prices of
rough diamonds, costs of power and diesel, acts of foreign governments and the
outcome of legal proceedings, inaccurate geological and recoverability
assumptions (including with respect to the size, grade and recoverability of
mineral reserves and resources), and unanticipated operational difficulties
(including failure of plant, equipment or processes to operate in accordance
with specifications or expectations, cost escalations, unavailability of
materials and equipment, government action or delays in the receipt of
government approvals, industrial disturbances or other job actions, adverse
weather conditions, and unanticipated events relating to health safety and
environmental matters).

 

Accordingly, readers are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date the statements were
made, and the Company does not assume any obligations to update or revise them
to reflect new events or circumstances, except as required by law.

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 

Hannah Reynish, Investor Relations & Communications, +1 604 674 0272,
info@lucaradiamond.com (mailto:info@lucaradiamond.com) ;

Sweden, Robert Eriksson, Investor Relations & Public Relations, +46 701
112615, reriksson@rive6.ch (mailto:reriksson@rive6.ch) ;

UK Public Relations, Charles Vivian / Jos Simson, Tavistock, +44 778 855 4035,
lucara@tavistock.co.uk (mailto:lucara@tavistock.co.uk)

 

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