LUCARA AND HB ANNOUNCE GROUNDBREAKING PARTNERSHIP FOR 2020 Sales Agreement for All +10.8 Carat Rough Diamonds Through FY2020
July 15, 2020
PRESS RELEASE
LUCARA AND HB ANNOUNCE GROUNDBREAKING PARTNERSHIP FOR 2020
Sales Agreement for All +10.8 Carat Rough Diamonds Through FY2020
VANCOUVER, July 15, 2020 /CNW/ - (LUC – TSX, LUC – BSE, LUC – Nasdaq Stockholm)
Lucara Diamond Corp. (“Lucara” or the “Company”) is pleased to announce that it has entered
into a definitive supply agreement for the remainder of 2020 with HB Group out of Antwerp,
Belgium (“HB”), in respect of all diamonds produced in excess of 10.8 carats in size from its
100% owned Karowe Diamond Mine in Botswana. Large, high value diamonds in excess of 10.8
carats in size from Karowe account for approximately 70% of Lucara’s annual revenues , and
though the mine has remained fully operational throughout the Covid- 19 pandemic, Lucara
made a deliberate decision not to tender any of its +10.8 carat inventory after early March 2020
amidst the uncertainty caused by the global crisis.
Under the terms of this novel supply agreement with HB, the purchase price paid for Lucara’s
+10.8 carat rough diamonds shall be based on the estimated polished outcome, 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. This unique pricing
mechanism is expected to deliver regular cash flow for this important segment of our
production profile at superior prices.
ADVANTAGES:
• Regular cash flow for Lucara using a superior pricing mechanism
• Significant potential revenue upside, particularly suited for Lucara’s large, exceptional
diamonds
• Increased tax revenue and additional beneficiation opportunities for the Government of
Botswana
• The creation of a more efficient, streamlined, supply chain that achieves complete
alignment between Lucara and HB to maximize the value of each +10.8 carat diamond
produced at Karowe
Eira Thomas, CEO commented: “Building on the partnership established for the manufacturing
of the Sewel ô earlier this year , Lucara is pleased to have now s ecured a broader supply
agreement with HB to purchase all of our +10.8 carat rough diamonds, through to year-end.
This agreement will deliver regular revenues on superior pricing terms to those currently being
achieved at tender , and, helps position Lucara to move forward with key underground
expansion activities for Karowe in 2020. It is our strong view that the success of our industry
in these very uncertain times , requires better alignment between producers, manufacturers,
and retailers to establish a healthier, more efficient global diamond supply chain. We are excited
to be working with HB to support this new paradigm.”
Oded Mansori, Co-Founder of HB Group, commented: “Aligned in our core values and beliefs,
HB is pleased to be entering into this definitive supply agreement with Lucara, turning our long-
term vision for transparency and sustainability in the value chain into reality. HB represents a
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new, innovative approach, using technologies that nullify speculation in favor of a stronger eco-
system, the first of its kind for our industry.”
Eira Thomas
President and Chief Executive Officer
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For further information, please contact:
North America Christine Warner, Investor Relations & Communications
+1 604 689-7842 | [email protected]
Sweden Robert Eriksson, Investor Relations & Public Relations
+46 701 112615 | [email protected]
UK Public Relations Emily Moss / Jos Simson, Tavistock
+447788554035 | [email protected]
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.
ABOUT HB GROUP
The HB Group is a technology company focused on diamonds, based in Antwerp. Given the
extensive experience in the diamond sector of several of the Group's co-founders the company
has broadened the concept of transparency with a focus on the end to end supply chain
management in order to simplify the complexities and challenges of global diamonds supply
chains.
The information in this release is subject to the disclosure requirements of the Company under
the EU Market Abuse Regulation. This information was publicly communicated on July 15, 2020
at 2:00 pm 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 a s "expects",
"anticipates", "believes", "intends", "estimates", "potential", "possible" and similar expressions,
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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 benefits of the supply arrangement with HB, the ultimately achieved pricing/revenues and
predictability of cash flows from the supply arrangement with respect to Karowe diamonds,
the increased opportunities for the Government of Botswana, anticipated production from the
Karowe mine, the ability of the Company to progress its planned underground expansion
activities for the Karowe mine in 2020 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 the rapidly evolving regulatory landscape and market
conditions related to the COVID -19 pandemic, and the operational and travel bans that have
been imposed or may be expanded into regions impacting Lucara’s operations, those factors
discussed in or referred to under the heading "Risks and Uncertainties"' in the Company's most
recent Annual Information Form av ailable 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 appro vals, 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.