TIDM0QUI
RNS Number : 2797K
Lucara Diamond Corp
24 August 2023
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
cost 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 Lenders, we appreciate their willingness to
grant an extension to the Company's working capital facility and a
temporary deferral 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 involved
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 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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LinkedIn
For further information, please contact:
Hannah Reynish Investor Relations & Communications
+1 604 674 0272| info@lucaradiamond.com
Sweden Robert Eriksson, Investor Relations & Public
Relations
+46 701 112615 | reriksson@rive6.ch
UK Public Relations Charles Vivian / Jos Simson, Tavistock
+44 778 855 4035 | 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 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 connection 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 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 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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END
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