REG - Lucara Diamond Corp - LUCARA ANNOUNCES Q2 2023 RESULTS

Lucara DiamondAnnouncement

10/08/2023 07:00

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RNS Number : 8718I  Lucara Diamond Corp  10 August 2023

August 9, 2023

 

NEWS RELEASE

 

LUCARA ANNOUNCES Q2 2023 RESULTS

 

VANCOUVER, August 9, 2023 /CNW/ (LUC - TSX, LUC - BSE, LUC - Nasdaq Stockholm)

 

Lucara Diamond Corp. ("Lucara" or the "Company") today reports its results for
the quarter ended June 30, 2023.

Q2 2023 HIGHLIGHTS

·      Guidance maintained.

·     Revenue for the quarter ended June 30, 2023 totalled $41.1
million.

·     The Q2 2023 operating cash cost of $27.97 per tonne of ore
processed((1)) was well below the expected annual operating cash cost range of
$32.50 to $35.50 per tonne of ore processed.

·    All key operational metrics were on plan, with 0.7 million tonnes of
ore and 0.9 million tonnes of waste mined, 0.7 million tonnes of ore
processed, and 90,497 carats recovered from direct milled ore.

·      Cash flow generated from operating activities was $9.2 million.

·    An updated schedule and budget for the Karowe underground expansion
project ("Karowe UGP") was released. The duration of the construction period
increased, extending the anticipated commencement of production from the
underground from H2 2026 to H1 2028.  The revised forecast of costs at
completion is $683 million.

·   The long-term outlook for diamond prices, combined with the potential
for exceptional stone recoveries and the continued strong performance of the
open pit could mitigate the modelled impact on project cash flows due to the
schedule slippage.

·    An investment of $22.5 million in the Karowe UGP in Q2 2023 focused
on sinking and grouting programs in the ventilation and production shafts.

Eira Thomas, President & CEO commented: "Karowe delivered another solid
quarter against plan in Q2 and as we returned to mining in the south lobe, the
proportion of specials (diamonds greater than 10.8 carats) increased and has
so far included the recovery of 13 stones over 100 carats that will be
polished and sold in the latter half of the year. The rebased schedule and
budget will delay production from the underground and has increased costs by
approximately 25%, however, sufficient surface stockpiles ensure that the mill
will operate to capacity during this period and the project remains
economically robust. The expansion continues to have the support of our
largest shareholder."

 

REVIEW FOR THE QUARTER ENDED JUNE 30, 2023

·      Operational highlights from the Karowe Mine for Q2 2023 included:

o Ore and waste mined of 0.7 million tonnes (Q2 2022: 1.1) and 0.9 million
tonnes (Q2 2022: 0.4), respectively.

o 0.7 million tonnes (Q2 2022: 0.7) of ore processed.

A total of 90,497 carats recovered (Q2 2022: 86,317) at a recovered grade of
12.6 carats per hundred tonnes of direct milled ore (Q2 2022: 12.0).

§ A total of 162 Specials were recovered, with thirteen diamonds greater than
100 carats including four diamonds greater than 200 carats in weight.

§ Recovered Specials equated to 6.6% of the weight percentage of total
recovered carats from ore processed during Q2 2023 (Q2 2022 - 6.1%).

o The Karowe Mine has operated continuously for over two and a half years
without a lost time injury.

·      Financial highlights for the three months ended June 30, 2023
included:

o Revenues of $41.1 million (Q2 2022: $52.3 million) reflected a continuation
of weaker diamond prices and a planned change in product mix beginning in
early 2023. During Q2 2023, 12% of the carats processed were recovered from
the Centre Lobe and 88% were recovered from South Lobe material (Q2 2022: 100%
South Lobe ore). Most of the carats recovered in the second quarter will be
sold in the third quarter of 2023.

o Operating margins of 59% were achieved (Q2 2022: 67%). A strong operating
margin continues to be achieved despite price softness in the rough diamond
market.

o Karowe's +10.8 production, sold through HB, accounted for 63% (Q2 2022: 65%)
of total revenues recognized in Q2 2023.

o Adjusted EBITDA((1)) was $15.7 million (Q2 2022: $24.4 million), with the
change directly attributed to a decrease in revenues.

o Net income was $5.0 million (Q2 2022: $12.5 million), or $0.01 earnings per
share (Q2 2022: $0.03).

 

·      During Q2 2023, the Company invested $22.5 million into the
Karowe UGP:

o Grouting programs were the focus in both the ventilation and production
shafts. A grout cover was completed in the ventilation shaft along with
remedial grouting behind the concrete liner in previously dry portions of the
shaft. In the production shaft, a grout cover was initiated 10 metres earlier
than planned due to increased water inflows related to a water-making
subvertical joint feature.  Additional grouting was required to seal off
areas within an earlier grout cover.

o Shaft sinking in the ventilation shaft was comprised of 30 metres of
vertical advance in April followed by grouting. Sinking resumed in July 2023,
8 days ahead of schedule.

o In the production shaft, a total of 27 metres of vertical advance was
achieved during Q2, with the remainder of time dedicated to grouting.

o All components of the bulk power supply upgrade, including the Letlhakane
and Karowe Substations and 132 kV power line, were handed over to Botswana
Power Corporation.

o Mobilisation for civil works related to construction of the bulk air cooler
contractor commenced in late June.

o A contract for fabrication of the permanent men and materials winder was
signed during the quarter, representing the last major component for the
permanent winders.

·      Cash position and liquidity at June 30, 2023:

o Cash and cash equivalents of $26.7 million.

o $90.0 million drawn on the $170.0 million Project Loan for the Karowe UGP,
with no draws on the facility during the second quarter.

o The outstanding balance on the WCF increased from $23.0 million to $35.0
million through Q2 2023, resulting in available liquidity of $15.0 million.

o The Company has near-term commitments under its Facilities, including the
maturity date of the WCF on September 1, 2023 and the requirement to fund a
cost overrun facility. Due to these near-term commitments, there is concern
regarding the Company's ability to meet its commitments and discharge its
obligations in the normal course of business. While Management believes the
Company will be able to resolve the noted items through its ongoing engagement
with its Lenders, there can be no assurance that those efforts will be
successful. See further details in the section "Liquidity and Capital
Resources" of the Company's MD&A for the quarter ended June 30, 2023 and
refer to Note 1 of the condensed interim consolidated financial statements for
the three and six months ended June 30, 2023.

DIAMOND MARKET

The longer-term outlook for natural diamond prices remains positive, anchored
on improving fundamentals around supply and demand as many of the world's
largest mines reach their natural end of life over the next decade.
Following on the record high diamond prices achieved in early 2022, a softer
diamond market emerged in the latter half of 2022 which has persisted into the
second quarter of 2023, the result of global economic concerns combined with
geopolitical uncertainty, including the ongoing conflict in Ukraine. Prices
continued to show signs of stabilization, however, as China continues to
open-up post-Covid. Sales of lab-grown diamonds increased during the period.
Intense competition combined with improvements in technology continue to drive
prices of lab grown diamonds down. This further differentiates this market
segment from the natural diamond market and highlights the unique nature and
inherent rarity of natural diamonds. The longer-term market fundamentals
remain unchanged and positive, pointing to strong price growth over the next
few years as demand is expected to outstrip future supply, which is now
declining globally.

2023 OUTLOOK

This section of the press release provides management's production and cost
estimates for 2023. These are "forward-looking statements" and subject to the
cautionary note regarding the risks associated with forward-looking
statements. Diamond revenue guidance does not include revenue related to the
sale of exceptional stones (an individual rough diamond which sells for more
than $10 million), or the Sethunya.

No changes were made to the Company's 2023 Guidance (released in December
2022).

 

 Karowe Diamond Mine                                                                    Full Year - 2023
 In millions of U.S. dollars unless otherwise noted
 Diamond revenue (millions)                                                             $200 to $230
 Diamond sales (thousands of carats)                                                    385 to 415
 Diamonds recovered (thousands of carats)                                               395 to 425
 Ore tonnes mined (millions)                                                            1.9 to 2.3
 Waste tonnes mined (millions)                                                          2.2 to 2.8
 Ore tonnes processed (millions)                                                        2.6 to 2.9
 Total operating cash costs((1)) including waste mined((2)) (per tonne processed)       $32.50 to $35.50
 Botswana general & administrative expenses including marketing costs (per tonne        $3.50 to $4.50
      processed)
 Tax rate((3))                                                                          0%
 Average exchange rate - USD/Pula                                                       12.0

(1) Operating cash costs are a non-IFRS measure.  See "Non-IFRS Financial
Performance Measures".

(2) Includes ore and waste mined cash costs of $7.00 to $8.00 (per tonne
mined) and processing cash costs of $12.00 to $13.00 (per tonne processed).

(3) The Company is subject to a variable tax rate in Botswana based on a
profit and revenue ratio which increases as profit as a percentage of revenue
increases. The lowest variable tax rate is 22% while the highest variable tax
rate is 55% (only if taxable income were equal to revenue).  Capital
expenditures are deductible when incurred. With planned capital expenditures
of up to $105 million for the UGP, a tax rate of 0% is forecast for 2023.
Should capital expenditures vary from plan, the Company could be subject to
current tax.

DIAMOND SALES

Karowe diamonds are sold through three separate and distinct sales channels:
through the HB sales agreement, on the Clara digital sales platform and
through quarterly tenders.

HB SALES AGREEMENT FOR +10.8 CARAT DIAMOND PRODUCTION FROM KAROWE

For the three months ended June 30, 2023, the Company recorded revenue of
$25.8 million from the HB agreement (inclusive of top-up payments of $5.1
million), as compared to revenue of $32.4 million (inclusive of top-up
payments of $13.1 million). Lower revenue in Q2 2023 is reflective of an ore
mix which included Centre Lobe material.

The decrease in revenue in Q2 2023 versus the comparative quarter can be
attributed primarily to the number of high value diamonds delivered to HB in
preceding quarters which were sold in the current period. Top-up values will
typically increase as the more valuable stones move through production and are
sold. The lower top-ups recognized in Q2 2023 reflect the value of the stones
delivered, consistent with the change in product mix during H1 2023.

Recovered Specials equated to 6.6% of the weight percentage of total recovered
carats from ore processed during Q2 2023 with 12% of the carats recovered from
the Centre Lobe and 88% recovered from South Lobe material (Q2 2022: 100%
South Lobe ore). Natural variability in the quality profile of the +10.8ct
production in any production period or fiscal quarter results in fluctuations
in recorded revenue and associated top-ups.  This result is consistent with
the resource model and expected.

Despite the overall decrease in revenue recognized in Q2 2023, diamond market
fundamentals continued to support healthy prices from the multi-year highs
observed at the peak in Q1 2022.

CLARA SALES PLATFORM

Total volume transacted on the platform was $5.7 million in Q2 2023, with
non-Karowe goods representing 48% of the total sales volume transacted,
generating revenue of $5.5 million. The Company continues to be focused on
growing third party volumes through the platform in 2023, both from primary
diamond producers and the secondary market sources. The number of buyers on
the platform reached 100 as at June 30, 2023.

During Q2 2023, the sales volume transacted decreased as volumes and lower
valued goods were placed for sale due to the shift in product mix from the
Karowe Mine.  A soft market was observed; however, prices have remained
fairly flat between Q1 2023 and Q2 2023 with strength in the stones between 5
to 10.8 carats in size.

QUARTERLY TENDER

A total of 67,673 carats were sold in the May 2023 tender, generating revenues
of $9.8 million (Q2 2022 tender: $10.5 million from the sale of 59,926
carats). Rough diamond prices remained near a multi-year high point at the
time of the Q2 2022 tender. The Q2 2023 tender reflected a 17% decrease in the
market from the comparative quarter's tender.

KAROWE UNDERGROUND EXPANSION UPDATE

The Karowe UGP is designed to access the highest value portion of the Karowe
orebody, with initial underground carat production predominantly from the
highest value eastern magmatic/pyroclastic kimberlite ("EM/PK(S)") unit.  The
underground expansion is expected to extend mine life to at least 2040 and is
forecast to contribute approximately $4 billion in additional revenues using
conservative diamond price assumptions which are un-escalated and exclude
exceptional stone revenues.

On July 16, 2023, an update to the Karowe UGP schedule and budget was
announced.  This update was initiated in response to slower than planned ramp
up to expected sinking rates, and, to account for time incurred to date, as
well as for anticipated future grouting programs.  Grouting programs took
longer than anticipated due to a combination of high-water volumes in the
sandstone lithologies between 870 and 752 metres above sea level in depth (144
metres to 262 metres below the shaft collar) combined with technical
challenges associated with the transition to main sinking.

The updated schedule incorporates a 28% increase in the duration of
construction, extending the anticipated commencement of production from the
underground from H2 2026 to H1 2028.  The revised forecast of costs at
completion is $683 million (including contingency), a 25% increase to the May
2022 estimated capital cost of $547 million. The increase of $136.0 million in
estimated capital to reach project completion is predominantly related to
increased schedule duration and related labour costs (about 56% of the total),
grouting costs (approximately 20% of the total capital increase), with the
balance of the increase attributable to Owner's costs, procurement, and
indirect project costs.  As at June 30, 2023, capital expenditures of $264.5
million had been incurred and total capital commitments of $369.7 million had
been made, inclusive of incurred amounts.  The Company has notified its
lenders of the expected increases to both the schedule duration and the
projected cost to complete the Karowe UGP. The Company's debt package consists
of a $170 million Project Loan to fund the development of an underground
expansion at the Karowe Mine, and a $50 million WCF.

The Karowe UGP remains technically and economically feasible, however, the
impact of actual and modelled delays changes the revenue profile due to the
use of lower-grade, stockpiled ore for mill feed rather than high-grade ore
from the underground as previously planned.  Sufficient surface stockpiles of
South, Centre and North Lobe kimberlite ore are available to maintain current,
un-interrupted mill feed to the plant for the duration of the anticipated
delay.  The long-term outlook for diamond prices, combined with the potential
for exceptional stone recoveries and the continued strong performance of the
open pit could mitigate the modelled impact on project cash flows due to the
schedule slippage.

During the three months ended June 30, 2023, a total of $22.5 million was
spent on the Karowe UGP development, primarily in relation to ongoing
construction activities, including:

·     Main sinking in the production and ventilation shafts:

o  In response to water inflows from the sandstones, cover grouting was the
primary activity in both shafts.

o  While the existence of water-bearing sandstones layers was anticipated,
grouting within the regional Ntane and Mosolotane sandstone aquifers has
required significantly more volumes of chemical grout. In addition, some
remedial grouting in previously dry portions of the sandstone horizons has
been required in the ventilation shaft. These factors account for most of the
incurred delays to June 30, 2023.

o  The ventilation shaft reached 213 metres below collar, with a planned
final depth of 731 metres. The production shaft reached 185 metres below
collar, with a planned final depth of 765 metres.

·      Mobilisation for civil works related to construction of the bulk
air cooler contractor started in late June

·     A contract for fabrication of the permanent men and materials winder
was signed during the quarter, representing the last major component for all
of the permanent winders.

·     All components of the bulk power supply upgrade, including the
Letlhakane and Karowe Substations and 132 kV power line, were handed over to
Botswana Power Corporation.

·     The impact of implementing a behavioural-based safety training
program in Q4 2022 has been evident in 2023. Year-to-date, the UGP achieved a
six-month period with no reportable incidents delivering a six-month rolling
Total Recordable Injury Frequency Rate of zero.

The capital cost estimate for the underground expansion in 2023 is $105
million - see "2023 Outlook".  Activities for the Karowe UGP in Q3 2023 are
expected to include the following:

·     Sinking and grouting within the ventilation and production shafts is
expected to continue.

·    Planned grouting events to the base of the Mosolotane
sandstone/mudstone transition are expected to be completed early in Q4 2023.
After completion of the current sandstone layer being grouted, one further
grouting event is planned in the ventilation shaft (213 metres below collar as
of June 30, 2023). Two additional grouting events are planned within the
production shaft (185 metres below collar as of June 30, 2023). Thereafter,
further grouting is not anticipated to be required until sinking reaches the
granite basement lithologies in late 2024. Grouting in the granite lithologies
is expected to be localized, rather than formational in nature.

·    Procurement of underground equipment, including dewatering pumps,
underground crush and convey systems and the permanent stage winder.

·     Construction of the bulk air cooler system.

·     Preparation of tender documents for a request for proposal for the
underground lateral development work; and,

·     Continuation of detailed design and engineering of the underground
mine infrastructure and layout.

FINANCIAL HIGHLIGHTS - Q2 2023

                                                                    Three months ended June 30,         Six months ended June 30,
 In millions of U.S. dollars, except carats or otherwise noted      2023            2022                2023           2022

 Revenues                                                       $   41.1            52.3            $   83.9           120.5
 Operating expenses                                                 (16.7)          (17.0)              (34.9)         (34.9)
 Net income for the period                                          5.0             12.5                6.0            31.5
 Earnings per share (basic and diluted)                             0.01            0.03                0.01           0.07
 Operating cash flow per share((1))                                 0.04            0.05                0.07           0.13
 Cash on hand                                                       26.7            40.8                26.7           40.8
 Amounts drawn on working capital facility((2))                     35.0            -                   35.0           -
 Amounts drawn on project finance facility                          90.0            65.0                90.0           65.0
 Karowe Revenue                                                     38.6            50.0                79.9           117.2
 Carats sold                                                        72,717          66,167              156,091        146,462

 

 

 QUARTERLY RESULTS OF OPERATIONS - KAROWE MINE, BOTSWANA

                                                 UNIT        Q2-23    Q1-23    Q4-22    Q3-22    Q2-22
 Sales
 Revenues from the sale of Karowe diamonds       US$M        38.6     41.3     40.1     46.5     50.0
 Karowe carats sold                              Carats      72,717   83,374   81,264   99,301   66,167
 Production
 Tonnes mined (ore)                              Tonnes      682,636  541,400  484,705  920,410  1,091,192
 Tonnes mined (waste)                            Tonnes      907,051  761,295  199,385  453,860  357,764
 Tonnes processed                                Tonnes      720,345  700,678  690,946  693,398  719,207
 Average grade processed((1))                    cpht ((*))  12.6     12.8     12.5     11.4     12.0
 Carats recovered((1))                           Carats      90,497   89,640   86,655   78,879   86,317
 Costs
 Operating cost per tonne of ore processed((2))  US$         27.97    26.65    26.20    29.33    28.78

 Capital Expenditures
 Sustaining capital expenditures                 US$M        2.4      0.8      9.9      4.0      4.1
 Underground expansion project((3))              US$M        22.5     30.5     22.3     23.9     29.1

CONFERENCE CALL

The Company will host a conference call and webcast to discuss the results on
Thursday, August 10, 2023 at 7:00am Pacific, 10:00am Eastern, 3:00pm UK,
4:00pm CET.  To join the conference call please use the following link
https://emportal.ink/44C1eWS (https://emportal.ink/44C1eWS) or the phone
numbers listed below.

 

Conference ID:

88318539  / Lucara Diamond

 

Dial-In Numbers:

   Toll-Free Participant Dial-In North
America                 (+1) 888 390 0605

   UK Toll
free
0800 652 2435

   Local Vancouver
                         (+1) 416 764 8609

 

Webcast:

To view the live webcast presentation, please log on using this direct link:
https://app.webinar.net/5XdGxGqNErz (https://app.webinar.net/5XdGxGqNErz)

The presentation slideshow will also be available in PDF format for download
from the Lucara website (Link to presentation
(https://lucaradiamond.com/newsroom/presentations/) ).

 

Conference Replay:

A replay of the telephone conference will be available two hours after the
completion of the call until August 17, 2023. The pass code for the replay is:
318539#.

 

   Replay number (Toll Free North
America)                    (+1) 888 390 0541

   Replay number (Local)
                  (+1) 416 764 8677

 

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:

 

 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 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 August 9, 2023 at 2:30pm Pacific Time.

NON-IFRS FINANCIAL PERFORMANCE MEASURES

This news release refers to certain financial measures, such as adjusted
EBITDA, adjusted operating earnings, operating cash flow per share, operating
margin per carat sold and operating cost per tonne of ore processed, which are
not measures recognized under IFRS and do not have a standardized meaning
prescribed by IFRS. These measures may differ from those made by other
corporations and accordingly may not be comparable to such measures as
reported by other corporations. These measures have been derived from the
Company's financial statements, and applied on a consistent basis, because the
Company believes they are of assistance in the understanding of the results of
operations and financial position. Please refer to the Company's MD&A for
the quarter ended June 30, 2023 for an explanation of non-IFRS measures used.

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, forward-looking information and forward-looking statements may
include, but are not limited to, information or statements with respect to the
Company's revenues, sales, diamond recoveries, ore and waste mined, ore
processed, cash costs and expenses, and the Company's ability to continue as a
going concern, economic and geopolitical risks, expectations regarding
longer-term market fundamentals and price growth, the disclosure under "2023
Outlook", the Company's ability to extend the maturity date of its current WCF
from its existing Lenders prior to expiry and the related terms, the Company's
ability to receive a deferral of the deadline to fill the COF, the impact of
supply and demand of rough or polished diamonds, expectations regarding top-up
values and processing, the benefits to the Company of diamond supply
agreements with HB and the ability to generate better prices from the sale of
the Company's +10.8 carat production as a polished stone, projected capital
costs associated with the Karowe UGP, estimated capital costs, the timing,
scope and cost of additional grouting events, the Company's ability to comply
with the terms of the Facilities which are required to construct the Karowe
UGP, that expected cash flow from operations, combined with external financing
will be sufficient to complete construction of the  Karowe UGP, that the
estimated timelines to achieve mine ramp up and full production from the
Karowe UGP can be achieved, that sufficient stockpiled ore will be available
to generate revenue prior to the achievement of commercial production of the
Karowe underground mine, the economic potential of a mineralized area, the
size and tonnage of a mineralized area, anticipated sample grades or bulk
sample diamond content, expectations that the Karowe UGP will extend mine
life, forecasts of additional revenues, future production activity, the future
price and demand for, and supply of, diamonds, expectations regarding the
scheduling of activities for the Karowe UGP in 2023, future forecasts of
revenue and variable consideration in determining revenue, estimation of
mineral resources, development plans.

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, Economic and Geopolitical Risks" and "Risks and
Uncertainties" 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, changes in inflation, the
supply and demand for, deliveries of and the level and volatility of prices of
rough diamonds, costs of power and diesel, impacts of potential disruptions to
supply chains, 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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
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