Lucara Announces Extension of Working Capital Facility
August 23, 2023
NEWS RELEASE
LUCARA ANNOUNCES EXTENSION OF WORKING CAPITAL FACILITY
VANCOUVER, August 23, 2023 /CNW/ (LUC – TSX, LUC – BSE, LUC – Nasdaq Stockholm)
Lucara Diamond Corp. (“Lucara” or the “Company”) announces the short-term extension of the maturity of its $50
million senior secured working capital facility (the “WCF”) and a deferral to November 1, 2023 of the requirement
to place $52.9 million in a cos t overrun reserve account (the “CORA") by September 2, 2023. The CORA balance is
currently $18.3 million. All currency figures are in U.S. Dollars, unless otherwise stated.
The Company’s debt package consists of two facilities (the “Facilities”), a project finance facility of $170 million to
fund the development of an underground expansion at the Karowe Mine (the “Project Loan”), and the WCF which
is used to support ongoing operations. Presently, $90 million is drawn from the Project Loan and $35 million is drawn
from the WCF. The terms of the WCF extension to November 1, 2023, do not permit further draws.
In connection with the WCF extension and the CORA deferral, both to November 1, 2023 , the Company’s largest
shareholder, Nemesia S.a.r.l. (“Nemesia”), has agreed to provide a liquidity support guarantee in favour of the
Lenders of up to $15.0 million in aggregate (“Liquidity Guarantee”) to October 31, 2023, while discussions with the
Lenders are ongoing. In return, the Company has agreed to issue a debenture (the “Debenture”) to Nemesia to be
drawn down if Nemesia is required to make a payment under the Liquidity Guarantee. In consideration for providing
the Liquidity Guarantee , and subject to receipt of all required regulatory approvals, Lucara has agreed to issue
450,000 common shares as a fee upon execution of the Liquidity Guarantee and a further 450,000 common shares
should the Liquidity Guarantee be called upon in the event the Company’s cash balance decreases below $10.0
million. As an additional fee, Lucara has agreed to issue 7,500 common shares per month for each $500,000
outstanding until the amounts borrowed are repaid.
William Lamb, CEO, commented: “During this period of ongoing discussions with our L enders, we appreciate their
willingness to grant an extension to the Company’s working capital facility and a temporary defe rral of the cost
overrun reserve account requirements , to November 1, 2023. This , together with the support of our largest
shareholder in providing the Liquidity Guarantee, allows management to continue its focus on operations and the
underground project. The Company would like to thank all involve d in this process for their time, effort, and
consideration. The opportunity to expand the operations through the underground development adds significant
value to all stakeholders for many years to come.”
Liquidity Guarantee from Nemesia
Nemesia is an insider of the Company and, as a result of their provision of the Liquidity Guarantee and receipt of the
Debenture and 450,000 common shares in connection with the execution thereof, the transaction contemplated by
the Liquidity Guarantee will be considered a “related party transaction” under Multilateral Instrument 61 -101 –
Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company intends to rely on the
exemptions set forth in sections 5.5(a) and 5.7(a) of MI 61-101 from the valuation and minority shareholder approval
requirements of MI 61-101 in respect of Nemesia’s provision of the Liquidity Guarantee as the aggregate fair market
value of the common shares issued to Nemesia upon signing of the Liquidity Guarantee will be less than 25% of the
Company’s market capitalization.
A material change report in respect of the waiver and extension, including the provision of the Liquidity Guarantee
and the Debenture, will be filed in accordance with MI 61-101, but is not expected to be filed 21 days in advance of
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the execution of the Liquidity Guarantee as the Company wanted to close to implement these arrangements on an
expedited basis for sound business reasons.
On behalf of the Board,
William Lamb
President and Chief Executive Officer
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For further information, please contact:
Hannah Reynish Investor Relations & Communications
+1 604 674 0272| [email protected]
Sweden Robert Eriksson, Investor Relations & Public Relations
+46 701 112615 | [email protected]
UK Public Relations Charles Vivian / Jos Simson, Tavistock
+44 778 855 4035 | [email protected]
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 dia mond 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 23, 2023 at 5pm 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 and include, without limitation, receipt of regulatory approvals for the issuance of common
shares to Nemesia in co nnection with the Liquidity Guarantee; whether any amounts will be drawn under the
Liquidity Guarantee ; future value to be delivered by the UGP and the Company’s ability to continue as a going
concern in the event that the Facilities are not available to them longer-term.
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
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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. The value of the Company's shares, its financial results and its mining activities are
significantly affected by the price and marketability of the diamonds recovered. The sales price of a diamond is
determined by its characteristics. While the Karowe Diamond Mine has produced several large, high-value diamonds
in excess of 100 carats, there is no assurance that the diamonds recovered which are 100 carats or larger will have
the characteristics required to achieve a high sales price. Statements with respect to the length by which the Karowe
underground expansion project will extend the life of mine are based on key underlying assumptions including, but
not limited to: future diamond prices, future diamond recoveries, expected operating and capital costs, the timing
to achieve key construction milestones, the availability of sufficient financing, people, equipment and materials
when needed for construction and operation of the underground mine, the economic potential of a mineralized
area, the size and tonnage of a mineralized area, the estimation of mineral resources.
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 in Note 1 of the condensed interim consolidated financial statements for
the three and six months ended June 30, 2023, and in the related interim MD&A under the headings “Liquidity and
Capital Resources”, “COVID-19 Global Pandemic, Economic and Geopolitical Risks” and under the heading "Risks and
Uncertainties" in the Company's most recent Annual Information Form, both available at
http://www.sedarplus.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 delay s 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 relianc e 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.