Lucara Announces Operating Guidance FOR 2022
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 202 2. 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 202 2
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.”
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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 inves tment 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 pr oject
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 computa tion allows for the immediate deduction of
operating costs, including capital expenditures, in the year in which they are incurred. Based
on 202 2 revenue guidance of $18 5 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 t ransparency, global restrictions on
travel, and a new openness to the use of innovation and technology to create a more efficient
supply chain.
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On behalf of the Board,
Eira Thomas
President and Chief Executive Officer
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For further information, please contact:
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 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 operati ons 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.
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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 risk s 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 ac curate, 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 mos t 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 unant icipated 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.