REG - Lucara Diamond Corp - LUCARA ANNOUNCES FEASIBILITY STUDY FOR KAROWE

Lucara DiamondAnnouncement

14/03/2024 07:00

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RNS Number : 7908G  Lucara Diamond Corp  14 March 2024

March 13, 2024

 

NEWS RELEASE

 

LUCARA ANNOUNCES UPDATED FEASIBILITY STUDY FOR KAROWE UNDERGROUND PROJECT

 

VANCOUVER, BC - March 13, 2024 /CNW/ (LUC - TSX, LUC - BSE, LUC - Nasdaq
Stockholm)

 

Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to announce the
filing of a technical report (the "Report") for the updated Feasibility Study
("FS" or "Study"), prepared in accordance with National Instrument 43-101 -
Standards of Disclosure for Mineral Projects ("NI 43-101") on its Underground
Expansion Project

("UGP" or "Project") at the Karowe Diamond Mine ("Karowe") located in
Botswana. The Report is titled "Karowe Mine - Botswana 2023 Feasibility Study
Technical Report", with an effective date of June 30, 2023, and was prepared
for Lucara by JDS Energy & Mining Inc. The Report is available under the
Company's profile on SEDAR+ at www.sedarplus.ca (http://www.sedarplus.ca) or
from the Company's website at www.lucaradiamond.com
(http://www.lucaradiamond.com) .

 

Karowe is located in north-central Botswana, one of the world's most prolific
diamond producing areas, and is a producer of large, high value type IIa
diamonds and the only diamond mine to have produced four diamonds in excess of
1,000 carats in size. The underground expansion at Karowe is expected to
double the mine life, and to generate significant revenue and cashflow out to
2040, extending benefits to the Company, its employees, shareholders,
communities surrounding the mine, and Botswana. The Report provides an update
to the 2019 underground feasibility study ("2019 FS") and 2021 financed base
case to reflect changes to project duration, capital expenditure, and
technical updates to the Project. All amounts are in U.S. dollars unless
otherwise noted.

 

Combined Open Pit/ Underground Highlights

·      Extending mine life by 15 years;

·      Total life of mine ("LOM") diamond recoveries of 6.8 million
carats;

·      Operational highlights include ~42.4 million tonnes of ore mined
and ~52.2 million tonnes of ore processed;

·     Highest value EM/PK(S) unit of the South Lobe is the dominant rock
type mined over the LOM of the underground; a significant source of many large
high value diamonds, including the 1,109 carat Lesedi La Rona, the 549 carat
Sethunya, and more recently the 1,080 carat Type IIa white stone recovered in
August 2023;

·    Pre-production capital costs for the UGP totalling $683 million, to be
expended over an eight-year pre-production construction and commissioning
period until H2/2027, of which three and a half years have already been
successfully completed;

·      The UGP is projected to generate $1.1 billion in cash flow;

·      Fully financed project as announced on January 9, 2024 (link to
Press Release
(https://lucaradiamond.com/newsroom/news-releases/lucara-announces-successful-execution-of-amended-f-122882/)
), when the Company amended its debt package that was originally entered into
in 2021; and

·      The amended facilities consist of a project finance facility
("Project Loan") of $190.0 million (previously $170.0 million) to fund
underground development, and a $30.0 million (previously $50.0 million) senior
secured working capital facility (the "WCF") which is used to support ongoing
operations along with operating cash flow from the Karowe open pit.

William Lamb, President and CEO of Lucara Diamond Corp., commented: "Lucara is
excited to share the updated Feasibility Study for the Karowe Underground
Expansion Project, which reinforces our strategic decision to extend mine life
and continue to generate benefits for our stakeholders. Karowe is a
world-class mine, and we look forward to continuing to recover large,
exceptional diamonds from the South Lobe at Karowe."

 

This report is updated from the original 2019 UGP FS (link to Press Release
(https://lucaradiamond.com/newsroom/news-releases/lucara-announces-positive-feasibility-study-for-ka-122784/)
) and 2021 financed base case (link to Press Release
(https://lucaradiamond.com/newsroom/news-releases/lucara-announces-karowe-underground-expansion-proj-122831/)
) and encompasses the following significant modifications:

·      Project construction progress (surface infrastructure and
underground development) to June 30, 2023;

·      Revised economic modelling with updated diamond prices and
exchange rates, exclusion of sunk costs and inclusion of financing costs;

·      Re-baselining the UGP schedule and as a result, the open pit mine
and processing facility production plans;

·      Re-estimation of the current operations budgets and project
capital and operating cost projections;

·      Modifications to the mine design;

·      Fine tailings storage and management;

·      Advancement of detailed engineering designs;

·      Re-modeling of the hydrogeological conditions;

·      Underground dewatering and grouting methodology; and

·      Groundwater management on surface.

Project description

·   The UGP is focused on the South Lobe of the AK06 kimberlite;

·   The UGP is designed to support operation of a 2.7 million tonnes per
annum underground mine and processing plant;

·  8.5 metre finished internal diameter Production Shaft approximately 767
metres deep equipped to hoist a nominal 7,400 tonnes per day of ore and
additional development waste;

·    6 metre finished internal diameter unequipped Ventilation Shaft with a
planned final depth of 729 metres;

·    Extraction of approximately 400 vertical metres of the South Lobe of
the AK06 kimberlite from 310 metres above sea level ("masl") (700 metres below
surface) to the bottom of the depleted open pit (approximately 710 masl or 300
metres below surface).

Key Operational Parameters

Table 1: Key Operational
Parameters

 Tonnage and Grade                                   Karowe Base Case
 Waste Tonnes mined (millions)                       3.5
 Ore Tonnes mined (millions)                         42.4
 Processed Tonnes (millions)                         52.2
 Diamond grade (carats per hundred tonne or "cpht")  13.10

 based on a 1.25mm bottom cut-off size

 and inclusive of estimated mining dilution
 Recovered carats (millions)                         6.8
 Diamond revenue ($ millions)                        5,073
 Mine Life (years)                                   ~15 years

Source: 2023 FS

Feasibility Study Approach

The FS has been prepared following Canadian Institute of Mining Guidelines for
the development of an underground mine. Production from the underground is
planned after open pit operations have been completed and the Company will
rely on the processing of stockpiled material during the latter part of the
underground development and ramp-up to full production in Q1, 2028.

 

The results of the FS represent forward-looking information that are subject
to a number of risks, uncertainties and other factors that may cause results
to differ materially from those presented here.  (See "Cautionary Note
Regarding Forward Looking Statements" below.)

 

operating and Capital Cost Estimates

The mine operating cost estimate for the Karowe Project is based on a
combination of experience, reference projects, first principle calculations,
budgetary quotes, and factors as appropriate for a FS.

 

Table 2: Summary of Operating Cost Estimate

 Operating Costs               Average Annual((1))  Life of Mine  Tonnes Processed((2))  Unit Cost per tonne Processed  Weighting
                               M$                   M$            Mt                     $/t                            %
 Open Pit Mining Costs         24.2                 72.6          5.5                    13.2                           4
 Underground Mining Costs      29.5                 413.2         37.0                   11.2                           24
 Rehandle Costs                3.4                  23.6          9.7                    2.4                            1
 Process Costs                 24.7                 493.7         52.2                   9.5                            29
 Other Power Costs             5.3                  105.2         52.2                   2.0                            6
 G&A                           18.3                 365.8         52.2                   7.0                            21
 Cost of Sales                 4.4                  87.9          52.2                   1.7                            5
 Corporate Charges (Botswana)  8.0                  159.2         52.2                   3.1                            9
 Total                         86.1                 1,721.1       52.2                   33.0                           100

Notes:

((1)) Average cost per year in which costs occur.

((2)) Tonnes processed in relation to operating cost.

Source: 2023 FS

The capital cost estimate was prepared using a combination of first
principles, applying project experience and using vendor/ contractor provided
budgetary quotes while avoiding the use of general industry factors. The
estimate is derived from engineers, contractors, and suppliers who have
provided similar services to existing operations and have demonstrated success
in executing the plans set forth in the study.

 

Table 3: Capital Cost Summary

                           Pre-Production              Sustaining  LOM Total  Weight

 Capital Costs                                         (M$)        (M$)       (%)
                           Sunk   Estimated  Subtotal

                           (M$)   (M$)       (M$)
 Mining                    140.4  253.1      393.5     124.8       518.2      63%
 Site Development          12.7   13.4       26.1      6.6         32.7       4%
 Process Plant             -      0.1        0.1       -           0.1        0%
 Tailings and Mine Waste   -      -          -         42.8        42.8       5%
 On-site Infrastructure    13.0   5.1        18.1      -           18.1       2%
 Buildings and Facilities  2.1    3.1        5.2       -           5.2        1%
 Off-site Infrastructure   23.3   0.4        23.7      -           23.7       3%
 Project Indirects         9.4    21.7       31.1      1.4         32.5       4%
 Owner Costs               63.6   89.9       153.5     -           153.5      19%
 Subtotal                  264.5  386.8      651.3     175.6       826.9      100%
 Contingency               -      31.9       31.9      13.3        45.2
 Closure                   -      -          -         34.0        34.0
 Total Capital Costs       264.5  418.7      683.3     222.9       906.1

Source: 2023 FS

Economics

The main assumptions with respect to the economic model are listed in Table 4.
Table 5 shows the baseline diamond prices by zone.

 

Table 4: Economic Assumptions

 Item        Unit     Value
 BWP:US$ FX  BWP:US$  12.5
 ZAR:US$ FX  ZAR:US$  17

Source: 2023 FS

Table 5: Baseline Diamond Prices

 Unit        Unit  2023 FS
 North       $/ct  273
 Centre      $/ct  392
 EM/PK(S)    $/ct  828
 M/PK(S)     $/ct  707
 Stockpiles  $/ct  574

Source: 2023 FS

Sensitivities

A univariate sensitivity analysis was performed to examine which factors most
affect the Project economics when acting independently of all other cost and
revenue factors. Each variable evaluated was tested using the same percentage
range of variation, from -20% to +20%, although some variables may actually
experience significantly larger or smaller percentage fluctuations over the
LOM. The Project is most sensitive to diamond prices and grade and the least
sensitive to capital costs.

 

 

 

 

 

 

 

 

 

Table 6: Sensitivity Results (Post-Tax NPV @ 8%)

 Variable             Post-tax NPV(8%) (M$)
                      -20% Variance  -10% Variance  Base   +10% Variance  +20% Variance
 Diamond Price        252.3          400.1          531.8  672.0          811.3
 Mining Cost          556.8          544.3                 519.2          506.7
 Processing Cost      561.6          546.4                 517.1          502.4
 All Operating Costs  607.1          568.1                 495.6          459.6
 Upfront CAPEX        584.6          556.6                 509.3          487.0
 Sustaining CAPEX     548.1          539.9                 523.6          515.5
 All capital costs    602.3          565.4                 501.2          473.1

Source: 2023 FS

Mineral Resources

The 2023 mineral resource estimate for Karowe incorporates drilling and
sampling data obtained prior to 2018, and additional drilling and sampling
information obtained in 2018/ 2019 which targeted delineation of the deep
extension of South Lobe (deeper than approximately 600m from surface). In
2019, the geological data were used to develop an updated internal geology
model for the South Lobe and to update the external contacts for the South,
Centre and North Lobes. The 2023 update also includes geological information
and production data derived from open pit mining to the end of June 30, 2023.

 

The 2023 mineral resources for Karowe, as summarized in Table 7, have been
classified as either Indicated or Inferred Mineral Resources, according to CIM
Definition Standards for Mineral Resources and Mineral Reserves (CIM, 2014).
Mineral Resources reported are inclusive of those portions of the Mineral
Resource that have been converted to Mineral Reserves and have an effective
date of June 30, 2023.

 

Table 7: Karowe 2023 Mineral Resource Statement (effective date of June 30,
2023)

 Classification  Domain          Volume (Mm(3))  Tonnes (Mt)  Density (t/m(3))  Carats (Mcts)  Grade (cpht)  Average ($/ct)
 Indicated       South_M/PK(S)   7.02            20.92        2.96              2.27           10.8          707
                 South_EM/PK(S)  6.77            19.77        2.90              4.16           21.0          828
                 Centre          0.30            0.81         2.57              0.12           15.5          392
                 North           0.18            0.42         2.45              0.05           11.6          273
 Total Indicated                 14.27           41.92        2.90              6.60           15.8          793
 Inferred        South_M/PK(S)   0.10            0.31         3.05              0.03           10.5          707
                 South_EM/PK(S)  1.40            4.18         2.97              0.87           20.9          828
                 South_KIMB3     0.32            0.94         2.94              0.10           10.9          707
 Total Inferred                  1.82            5.42         2.97              1.01           18.6          804

Notes:

1.  Mineral Resources are not Mineral Reserves and do not have demonstrated
economic viability. All numbers have been rounded to reflect accuracy of the
estimate;

2.  Mineral Resources are in-situ Mineral Resources and are inclusive of
in-situ Mineral Reserves;

3.  The base of the South Lobe Indicated Mineral Resource is 250masl and
60masl for the inferred resource;

4.  Mineral Resources are exclusive of all mine stockpile material;

5.  Mineral Resources are quoted above a +1.25 mm bottom cut-off and have
been factored to account for diamond losses within the smaller sieve classes
expected within the current configuration of the Karowe process plant;

6.  Inferred Mineral Resources are estimated on the basis of limited
geological evidence and sampling, sufficient to imply but not verify
geological grade and continuity. They have a lower level of confidence than
that applied to an Indicated Mineral Resource and cannot be directly converted
into a Mineral Reserve;

7.  Average diamond value estimates are based on 2023 diamond sales data
provided by Lucara Diamond Corp.; and

8.  Mineral Resources have been estimated with no allowance for mining
dilution and mining recovery.

Source: 2023 FS

Mineral Reserves

The effective date for the Mineral Reserve Estimate contained in the updated
FS report is June 30, 2023 and was prepared by Qualified Person (QP) Brandon
Chambers, P.Eng. All Mineral Reserves in Table 8 are classified as Probable
Mineral Reserves. The Mineral Reserves, except stockpiles, are not in addition
to the Mineral Resources, but are a subset thereof.

 

The QP has not identified any legal, political, or environmental risks that
would materially affect potential Mineral Reserves development.

 

Table 8: Karowe Mineral Reserve Estimate (effective date of June 30, 2023)

 Lobe              Reserve Category  Ore Tonnage  Carats      Grade   LOM Diamond Price
                   (Mt)                           ('000s ct)  (cpht)  ($/ct)
 Open Pit
 Centre            Probable          0.6          96          16.3    392
 South - EM/PK(s)  Probable          1.3          323         25.4    828
 South - M/PK(s)   Probable          3.6          384         10.7    707
 Open Pit          Total             5.5          803         14.7    718
 Underground
 South - EM/PK(s)  Probable          18.6         3,361       18.1    828
 South - M/PK(s)   Probable          18.4         1,871       10.2    707
 Underground       Total             37.0         5,232       14.2    785
 Stockpile
 Mixed Stockpile   Probable          4.0          502         12.7    433
 Life of Mine      Probable          5.8          296         5.1     574
 Stockpile         Total             9.7          798         8.2     485
 Combined
 All               Total             52.2         6,834       13.1    742

Notes:

1.     Prepared by Brandon Chambers, P.Eng. JDS Energy & Mining Inc.;

2.     CIM definitions were followed for Mineral Reserves;

3.     Process recovery of the diamonds was assumed to be 100% as the
recoveries were included in the mineral resource block model assumptions and
therefore have taken recoveries into account;

4.     The bottom elevation of the Probable Reserve is 310 masl;

5.     Mineral Reserves are quoted above a +1.25 mm bottom cut-off and
have been factored to account for diamond loses within the smaller sieve
classes expected within the current configuration of the Karowe Process Plant;

6.     Diamond price estimates are provided by Lucara; prices are derived
from historical sales and adjusted for current market conditions;

7.     Tonnages are rounded to the nearest 100,000 t, diamond grades are
rounded to one decimal place to properly reflect the Reserve estimate
accuracy;

8.     Tonnage and grade measurements are in metric units; contained
diamonds are reported as thousands of carats;

9.     Open pit Mineral Reserves are estimated at a cut-off value of $37/t
based on an open pit mining cost of $13/t, a processing cost of $12/t and a
G&A cost of $12/t;

10.  Underground Mineral Reserves are estimated at a cut-off value of $35/t
based on an underground mining cost of $11/t, a processing cost of $12/t and a
G&A cost of $12/t;

11.  Mine Call Factor is a modifying factor used by Lucara which tracks the
reconciliation between the block model and actual recovered carats. Mine Call
Factor is assumed to be 100%, historically this factor has reconciled either
near or above 100%, however in the 12-month period prior to the Reserve
Statement the Mine Call Factor has deviated away from historical average
performance and is currently at 95%;

12.  Underground dilution assumptions in the 2019 FS were revised in 2023.
Underground dilution included in the Reserve was estimated from the following
three sources:

•  1.0 m of zero-grade overbreak from stoping adjacent to the granite host
rock;

•  2.7 Mt of zero-grade overbreak from stoping adjacent to sedimentary
rocks (based on geomechanical modelling); and

•  Inclusion of inferred KIMB3 kimberlite within the overall pipe shape as
zero-grade waste.

13.  Stockpile Mineral Reserves are estimated at a cut-off value of $19/t
based on a rehandle cost of $2/t, a processing cost of $12/t and a G&A
cost of $5/t, when processed at the end of mine life;

14.  Stockpile Reserves are not included in the Karowe Mineral Resource
Estimate, which covered only in-situ mineralized material;

15.  Stockpile Reserves are based on surveyed volumes and block model grades;
and

16.  Stockpile LOM diamond price is determined from the weighted average of
the North, Centre, South - M/PK(s), and South - EM/PK(s) lobe ratios.

Source: 2023 FS

Geotechnical

A geotechnical investigation program was carried out to support underground
mine design, building on the open pit and underground preliminary economic
assessment ("PEA") geotechnical modelling carried out in 2017. The
geotechnical drilling, sampling and testing program was designed to comply
with the data confidence requirements of a FS, in support of a
feasibility-level mine design, and leading into optimization of the design
implementation. The investigation focused on defining the geotechnical
characteristics of the surrounding country rock as well as the South Lobe
kimberlite and involved the drilling, geotechnical logging and sampling of 37
diamond drillholes, totaling more than 23,500m, with field and laboratory
testing of the core samples. Almost 11,000 tests were conducted on samples
across the various lithologies.

 

Hydrogeology

Water control and hydrogeological context of the deposit and host rocks are
key elements in the mine plan. The AK6 deposit sits within layered,
sedimentary, regional aquifers that have been documented since the 1980's.

 

Since the release of the 2019 feasibility study report, five key updates were
made:

·      The groundwater flow model was updated;

·      A planned drainage gallery at the 680 Level (680 L) was not
implemented;

·      The groundwater flow model in the 2019 FS assumed that grouting
in the granites will take place in all underground development and will be 75%
successful. The predicted inflow rate in the updated model (2023) only assumed
66% successful grouting during shaft sinking and station development up to
January 1, 2026; the model also assumes that no grouting activities are
undertaken once underground pumping capacity is available unless particularly
high inflows are encountered that hinder development;

·      The underground drainage systems were updated; and

·      The depressurization target for the open pit slope was updated.

 

 

Mineral Processing

The Karowe processing plant has been treating unweathered South Lobe ore since
2015 and mineral processing characteristics are very well understood.

 

A comminution test program was conducted to test the milling characteristics
of the South Lobe material below the open pit to determine if the mill is
suitable for deeper EM/PK(S) ore.

 

The second test involved testing of Tomra's X-ray Transmission (XRT) machines
and associated software to determine their ability to differentiate between
diamonds, coal, carbonaceous shale and other waste rock. Due to the high
carbon content of coal and carbonaceous shales, they were of greatest concern.
The dilution of ore with carbonaceous shales (and the small, sporadic, coal
seams contained therein) is anticipated to occur during the later stages of
mine life. Testing was conducted by Tomra at their testing facilities in
Germany.

 

Mining

The currently operating open pit at Karowe is a conventional load and haul
operation. Open pit mine operations are expected to terminate mid-2025 at an
elevation of 713 masl. The mine currently has over three years of surface
stockpiled reserves, which will be consumed as required while the Underground
mine operations ramp up to commercial production.

 

The 2019 FS investigated several underground mining methods based on data and
information from an exhaustive field program conducted in 2018 and 2019 to
define mineral resource, geotechnical, and hydrogeological characteristics
necessary for making informed decisions at a FS-level study.

 

The inability for natural or preconditioned caving to occur has resulted in
the development of the Long Hole Shrinkage ("LHS") mine method, which is
essentially a fully assisted cave. The method involves a combination of
longhole drilling and blasting to create a large muck pile within the South
Lobe, followed by the managed drawdown of the blast material through a panel
cave extraction level.

 

The benefits of the LHS mining method include:

·      Highest value ore to be extracted first due to the bottom-up
mining approach;

·      Minimal development in weak, water-bearing lithologies near
surface;

·      Dilution will be delayed (occurring after the payback period) as
the weaker host rock is not exposed until later in the mine life;

·      Development of the underground mine can occur simultaneously with
the open pit operations;

·      Low operating costs;

·      Ease of operation after the drilling and blasting phase is
complete and small underground work force requirements;

·      Early exclusion of precipitation into the underground workings
until the crown pillar is blasted;

·      Significant ability to increase production after the drill and
blast phase is complete; and

·      Designed to manage natural caving should it occur.

Infrastructure

The UGP at Karowe will include the use of existing and new infrastructure at
the Karowe Mine. Current and planned infrastructure is designed to support the
operation of the mine and processing plant. Project construction over the past
two years has led to the completion of most of the surface infrastructure
components of the Project.

 

 

Permitting

Karowe, which has been operating since 2012, completed its latest
Environmental Impact Assessment/ Environmental Management Plan in 2020 (to
incorporate the UGP) and received approval from the Botswana Department of
Environmental Affairs during the same year.

 

The mining license was renewed in 2021 for a period of 25 years and expires on
January 3, 2046.

 

Conclusions

It is the conclusion of the Qualified Persons ("QPs") that the FS summarized
in this press release contains adequate data and information to support a FS.
Standard industry practices, equipment and design methods were used in the FS.
Since the 2019 FS, the UGP has advanced considerably in terms of financing,
detailed engineering and construction while the open pit mine and processing
facility have operated well and maintained targeted production.

 

To date, the QPs are not aware of any fatal flaws for the UGP.

 

Qualified Person ("QPs")

The FS was prepared under the direction of JDS Energy & Mining Inc. and by
leading independent industry consultants. Mr. Gord Doerksen P. Eng is the
Project manager and responsible for the study completion and an Independent
Qualified Person under National Instrument 43-101. Dr. J.P. Armstrong, Ph.D.
P. Geo., the Company's VP Technical Services and a Qualified Person under
National Instrument 43-101, and Mr. Doerksen have reviewed and approved the
contents of this news release.

 

The results of the Karowe Underground FS will be summarized in a Technical
Report prepared pursuant to Canadian Securities Administrators' National
Instrument 43-101 that will be filed on SEDAR+ (https://www.sedarplus.ca
(https://www.sedarplus.ca/landingpage/) ) within 45 days of this press release
and will also be available on the Company's website
(https://lucaradiamond.com/ (https://lucaradiamond.com/) ).

 

On behalf of the Board,

 

William Lamb

President and Chief Executive Officer

 

 

Follow Lucara Diamond on Facebook (https://www.facebook.com/LucaraDiamond/) ,
Instagram (https://www.instagram.com/lucaradiamond/) , and LinkedIn
(https://www.linkedin.com/company/lucara-diamond-corp-)

 

For further information, please contact:

 

 Vancouver            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)

 

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 which ensures 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 Project 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 March 13, 2024 at 5:00 p.m. Pacific Time.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain of the statements made herein contain certain "forward-looking
information" and "forward-looking statements" as defined in applicable
securities laws. Generally, any statements that express or involve discussions
with respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance and often (but not
always) using forward-looking terminology such as "expects", "is expected",
"anticipates", "believes", "plans", "projects", "estimates", "budgets",
"scheduled", "forecasts", "assumes", "intends", "strategy", "goals",
"objectives", "potential", "possible" or variations thereof or stating that
certain actions, events, conditions or results "may", "could", "would",
"should", "might" or "will" be taken, occur or be achieved, or the negative of
any of these terms and similar expressions) are not statements of historical
fact and may be forward-looking statements.

Forward-looking information and statements are based on the opinions and
estimates of management as of the date such statements are made, and they are
subject to several 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, including risks
related to. 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 the following: potential to and length by which the UGP will extend the
life of mine; updated resource and reserves for the Karowe Mine, including the
Underground and the total expected life of mine production; estimates of the
Company's production, operating margins and sales volumes for the Karowe Mine,
including the Underground and associated cash flow and revenues; estimates of
the economic benefits of the Underground, including the timing for the UGP to
pay back capital; anticipated total capital expenditures for the Underground
and the schedule to develop and complete the UGP; continued availability of
external financing; that expected cash flows from open pit operations,
combined with external financing, will be sufficient to complete construction
of the UGP; the ability to integrate the underground operations seamlessly
into the existing infrastructure; the timing of key construction milestones
including shaft sinking activities; the anticipated mine plan and mining
methods; that the decisions taken to de-risk the UGP will be successful; that
the people, equipment and materials required to build the UGP will be
available when required to maintain the proposed UGP schedule; anticipated
changes in diamond pricing, including trends in supplies and demands; changes
to foreign currency exchange rate; the Company's adoption of and compliance
with internationally recognized standards including IFC Performance Standards
and the Equator Principles; and other 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-looking information as a
result of those factors discussed in or referred to under the heading "Risks
and Uncertainties"' in the Company's most recently filed Annual MD&A and,
in the Company's most recent Annual Information Form available at SEDAR+ at
www.sedarplus.ca (http://www.sedarplus.ca) , as well as the Company's ability
to access the markets and generate revenues at anticipated diamond prices, the
Company's ability to continue to comply with the terms of its debt financing,
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).

The foregoing is not exhaustive of the factors that may affect any of our
forward-looking statements. Forward-looking statements are statements about
the future and are inherently uncertain, and our actual achievements or other
future events or conditions may differ materially from those reflected in the
forward-looking statements due to a variety of risks, uncertainties, and other
factors, including, without limitation, those referred to in this news
release. Accordingly, readers and investors should not place undue reliance on
forward-looking statements. Forward-looking information and statements are
made as of the date of this disclosure and accordingly are subject to change
after such date. Except as required by law, the Company disclaims any
obligation to revise any forward-looking information and statements to reflect
events or circumstances after the date of such information and statements. All
forward-looking information and statements contained or incorporated by
reference in this news release are qualified by the foregoing cautionary
statements.

 

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