REG - Lucara Diamond Corp - LUCARA ANNOUNCES OPERATING GUIDANCE FOR 2022

Lucara DiamondAnnouncement

24/11/2021 12:35

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RNS Number : 4270T  Lucara Diamond Corp  24 November 2021

November 24, 2021

 

NEWS RELEASE

 

LUCARA ANNOUNCES OPERATING GUIDANCE FOR 2022

 

VANCOUVER, November 24, 2021 /CNW/ (LUC - TSX, LUC - BSE, LUC - Nasdaq
Stockholm)

 

Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to provide
operating guidance for 2022 (all amounts in USD unless otherwise stated).

 

2022 OUTLOOK

This section provides management's production and cost estimates for 2022.
These are "forward-looking statements" and subject to the cautionary note
regarding the risks associated with forward-looking statements.

 

 Karowe Mine (all amounts in US Dollars)                                        Full Year 2022
 Diamond revenue                                                                $185 million to $215 million
 Diamond sales                                                                  300,000 carats to 340,000 carats
 Diamonds recovered                                                             300,000 carats to 340,000 carats
 Tonnes mined - Ore                                                             3.1 million to 3.5 million
 Tonnes mined - Waste                                                           1.5 million to 2.1 million
 Tonnes processed - Ore                                                         2.6 million to 2.8 million
 Total operating cash costs per tonne processed (including (a) to (b) below):   $29.50 to $33.50
 (a)   Cash cost per tonne mined (ore and waste)                                $5.75 to $6.25
 (b)   Cash cost per tonne processed                                            $12.00 to $13.00
 Botswana G&A expenses, including sales and marketing, per tonne processed      $3.50 to $4.00
 Tax rate                                                                       0%
 Average exchange rate - USD/Pula                                               11.0

 

Eira Thomas, President and CEO commented: "The business environment for
diamonds and diamond jewellery is the healthiest we've seen in several years,
spurred on by an improvement in global supply and demand fundamentals, a trend
which is expected to continue. In 2022, our tenth year of operations at
Karowe, Lucara anticipates producing up to 340,000 carats which will be sold
through its innovative, multi-sales channel approach generating revenues
between $185 and $215 Million. This does not include any estimated
contributions of revenue from large, exceptional diamonds that have
historically formed a regular part of Karowe's production profile. The
completion of a supplemental debt financing package in 2021 to support our
underground expansion project was a significant de-risking milestone for the
company and the project, which was $64 Million spent by Q3 2021 and 20%
complete. The underground expansion at Karowe provides access to the richest
portion of the orebody and will extend minelife to at least 2040. The project
remains on schedule and budget, with a forecasted spend of up to $110 Million
in 2022."

 

REVENUE AND SALES CHANNELS

In 2022, the Company's revenue forecast assumes that 100% of the carats
recovered will come from the higher value M/PK(S) and EM/PK(S) units within
the South Lobe in accordance with the mine plan, generating revenue between
$185 and $215 million in 2022. The Company will continue to use three
different sales channels to maximize revenue and generate consistent cash flow
to support the Company's operations and its investment in the underground
expansion project. Higher value stones greater than +10.8 carats in size will
continue to enter the manufacturing pipeline at HB, giving the Company
exposure to polished prices and regular cash flow from the highest value
portion of the Karowe production.

 

Quarterly tenders and regular sales through Clara, primarily for stones less
than 10.8 carats in size will continue, consistent with the practise from
previous years.

 

MINING AND PROCESSING ASSUMPTIONS

Following the successful project financing for the Karowe underground
expansion project in mid-2021, the open pit mine plan was revised to extend
the life of the open pit into 2026. Centre lobe material, combined with ore
from the underground development will replace lower grade stockpiles towards
the end of the open pit mine life. In 2022, the Company expects to mine
between 4.6 and 5.6 million tonnes, of which ore tonnes mined represent
approximately two-thirds of total tonnes mined. The assumptions for carats
recovered and sold as well as the number of tonnes processed are consistent
with achieved performance in recent years.

 

UNDERGROUND AND SUSTAINING CAPITAL EXPENDITURES

In 2022, capital costs for the underground expansion are expected to be up to
$110 million and will focus on the commencement of shaft sinking activities,
the commissioning of power and detailed engineering for the underground
development. Sustaining capital and project expenditures are expected to be up
to $17 million with a focus on completion of a community sports facility,
dewatering activities and an expansion of the tailings storage facility.

 

BOTSWANA TAX RATE

Lucara Botswana's progressive tax rate computation allows for the immediate
deduction of operating costs, including capital expenditures, in the year in
which they are incurred. Based on 2022 revenue guidance of $185 million to
$215 million and assuming the underground development expenditures of $110
million, the tax rate is expected to be 0% for 2022.

 

CLARA SALES PLATFORM

Clara, Lucara's 100% owned proprietary, secure, web-based digital sales
platform, continues to grow in terms of volume transacted and customer
participation. The number of buyers on the platform as of Q3 2021 was 87 and
the Company continues to maintain an active waiting list to manage supply and
demand. Platform trials and discussions with third party suppliers of rough
diamonds are ongoing to build supply, which remains a key objective for 2022
and beyond. The rationale for a web based digital sales platform for the
transaction of rough diamonds has never been stronger, sparked by industry's
need for increased transparency, global restrictions on travel, and a new
openness to the use of innovation and technology to create a more efficient
supply chain.

 

 

On behalf of the Board,

 

Eira Thomas

President and Chief Executive Officer

 

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

 

For further information, please contact:

 

                      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 Mine in Botswana and owns a 100% interest
in Clara Diamond Solutions, a secure, digital sales platform positioned to
modernize the existing diamond supply chain and ensure diamond provenance from
mine to finger. The Company has an experienced board and management team with
extensive diamond development and operations expertise. The Company operates
transparently and in accordance with international best practices in the areas
of sustainability, health and safety, environment, and community relations.

 

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 24, 2021 at 4:30am 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, and they 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 the following: the impact of COVID-19 pandemic on the Company's operations
and cash flows and its plans with respect to the Karowe underground expansion
project; the estimates of the Company's mineral reserves and resources;
estimates of the Company's production and sales volumes for the Karowe Diamond
Mine; estimated costs for capital expenditures related to the Karowe Diamond
Mine; production costs; exploration and development expenditures and
reclamation costs; expectation of diamond prices and the potential for the
supply agreement with HB to achieve both higher prices from the sale of
polished diamonds and to provide more regular cash flow than in previous
periods; estimates of variable consideration receivable pursuant to the HB
supply agreement; changes to foreign currency exchange rates; assumptions and
expectations related to the ongoing development of an underground mining
operation at Karowe including associated capital costs and timing;
expectations in respect of the development and functionality of the technology
related to the Clara platform, the intended benefits and performance of the
Clara platform, including ability to complete sales without viewing
diamonds,  the growth of the Clara platform, the timing and frequency of
sales on the Clara Platform, and the quantum and timing of participation of
third parties on the Clara platform; expectations regarding the need to raise
capital and its availability; possible impacts of disputes or litigation; and
other risks and uncertainties described under the heading "Risks and
Uncertainties" in the Company's most recent Annual Information Form available
at http://www.sedar.com (the "AIF").

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
"COVID-19 Global Pandemic" in the Company's most recent MD&A and under the
heading "Risks and Uncertainties" in the Company's most recent Annual
Information Form, both available at http://www.sedar.com, as well as changes
in general business and economic conditions, the ability to continue as a
going concern, 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.

 

 

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