TIDM0QUI
RNS Number : 9890U
Lucara Diamond Corp
29 November 2023
November 28, 2023
NEWS RELEASE
LUCARA ANNOUNCES OPERATING GUIDANCE FOR 2024 AND CFO
APPOINTMENT
VANCOUVER, November 28, 2023 /CNW/ (LUC - TSX, LUC - BSE, LUC -
Nasdaq Stockholm)
Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to
provide operating guidance for 2024 (all amounts in USD unless
otherwise stated).
2024 OUTLOOK
This section provides management's production and cost estimates
for 2024. 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 2024
------------------------------------------------ ---------------------
Diamond revenue $220 million to $250
million
------------------------------------------------ ---------------------
Diamond sales 345,000 carats to
375,000 carats
------------------------------------------------ ---------------------
Diamonds recovered 345,000 carats to
375,000 carats
------------------------------------------------ ---------------------
Tonnes mined - Ore 2.8 million to 3.2
million
------------------------------------------------ ---------------------
Tonnes mined - Waste 0.8 million to 1.4
million
------------------------------------------------ ---------------------
Tonnes processed - Ore 2.6 million to 2.9
million
------------------------------------------------ ---------------------
Total operating cash costs per tonne processed $28.50 to $33.50
------------------------------------------------ ---------------------
Underground expansion project Up to $100 million
------------------------------------------------ ---------------------
Sustaining capital Up to $10 million
------------------------------------------------ ---------------------
Average exchange rate - Botswana Pula per
United States Dollar 12.5
------------------------------------------------ ---------------------
REVENUE AND SALES CHANNELS
In 2024, the Company's revenue forecast assumes that 87% of the
carats recovered will come from the higher value M/PK(S) and
EM/PK(S) units within the South Lobe and the remaining carats
recovered will come from the Centre Lobe in accordance with the
mine plan, generating revenue between $220 and $250 million. South
Lobe material, while lower grade than the Centre and North Lobes,
has a higher weight percentage of stones greater than 10.8 carats
in size ("Specials").
The Company plans to use its sales channels to maximize revenue
and generate consistent cash flow to support the Company's
operations and its investment in the underground expansion project.
The Company expects to seek opportunities to sell its higher value
Specials through agreements whereby the rough stones are
manufactured, 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 smaller than 10.8 carats in size will
continue.
On November 10, 2023, Lucara announced a reduction in expected
annual revenue guidance for fiscal 2023 due to changes to the sales
mechanism for rough diamonds larger than 10.8 carats in size
following termination of the Company's diamond sales agreement with
HB in September 2023. The Company expects to monetize the +10.8
carat stones currently held in inventory in 2024. The revenue
forecast for 2024 does not include amounts related to the
inventory.
MINING AND PROCESSING ASSUMPTIONS
In 2024, the Company expects to mine between 3.6 and 4.6 million
tonnes, of which ore tonnes mined represent approximately three
quarters of total tonnes mined. The assumptions for carats
recovered and sold as well as the number of ore tonnes processed
are consistent with achieved plant performance in recent years. A
portion of the tonnes mined in 2024 will be stockpiled, prior to
the end of open pit mining in mid-2025. Stockpiled material is
planned to be processed between 2025 to 2027 before the mine
transitions to underground operations. Ore from the underground
development is expected to supplement lower grade stockpile
material, primarily from the upper benches of the South lobe,
during the transition to underground, beginning in 2027.
UNDERGROUND AND SUSTAINING CAPITAL EXPITURES
In 2024, capital costs for the underground expansion ("UGP") are
expected to be up to $100 million and will focus predominantly on
shaft sinking activities and station development. Surface works
will focus on completing the construction of the bulk air cooler
and installation of the cage winder. Tendering the underground
development contract along with underground equipment purchases are
also included in the 2024 project plan.
The underground expansion is expected to extend Karowe's 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 revenues from stones
sold in excess of $10 million. On July 16, 2023, an update to the
Karowe UGP schedule and budget was announced (Press Release). The
Company notified its Lenders of the expected increases to both the
schedule duration and the projected cost to complete the Karowe UGP
and is working closely with its Lenders to agree amendments to its
project facilities of $220 million. As part of the ongoing
amendments, the Lenders have granted certain waivers and extensions
to the Company.
Sustaining capital and project expenditures are expected to be
up to $10 million with a focus on replacement and refurbishment of
key asset components in addition to dewatering activities, and an
expansion of the tailings storage facility in accordance with
Global Industry Standard on Tailings Management.
CORPORATE UPDATE
Lucara is pleased to announce that Glenn Kondo will be rejoining
the Company as its Chief Financial Officer and Corporate Secretary
effective January 1, 2024. His previous roles and diamond industry
knowledge will contribute significantly to Lucara's strategic
financial planning and overall corporate success. Glenn will bring
valuable experience and expertise to the Company's financial
leadership.
William Lamb, President and CEO commented, "We are very pleased
to welcome Glenn back to Lucara. His previous experience at Lucara
will be instrumental in delivering on the key financial
fundamentals which drive shareholder returns."
On behalf of the Board,
William Lamb
President and Chief Executive Officer
Follow Lucara Diamond on Facebook, Instagram, and 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 November 28, 2023 at 5:00pm 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.
In particular, forward-looking information and forward-looking
statements in this news release may include, but are not limited
to, the diamond sales, projection and outlook disclosure under
"2024 Outlook", the Company's ability to successfully agree
amendments to its project debt facilities, the Company's ability to
secure further extensions and waivers (if required) pursuant to
terms of the project debt facilities; 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; the timing, scope and cost of additional grouting
events required at the UGP; production costs; development
expenditures and reclamation costs; expectation of diamond prices;
the benefits to the Company of diamond supply agreements with
manufacturers and the ability to generate better prices from the
sale of the Company's +10.8 carat production as a polished stone
and to provide more regular cash flow than in previous periods;
estimates of top-ups pursuant to diamond supply agreements;
assumptions related to foreign currency exchange rates and tax
rates; assumptions and expectations related to the ongoing
development of an underground mining operation at Karowe including
associated capital costs and timing; information or statements with
respect to the project debt facilities, the intended use of
proceeds of these debt facilities, the Company's ability to comply
with the terms of the project debt 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; the impact of COVID-19 pandemic and other economic and
geopolitical events on the Company's operations and cash flows and
its plans with respect to the Karowe underground expansion project;
the profitability of Clara and the Clara Platform and the scaling
of the digital platform for the sale of rough diamonds owned by
Clara; expectations regarding the need to raise capital and its
availability; possible impacts of disputes or litigation; and other
risks and uncertainties described under the heading "Risks and
Uncertainties" in the Company's most recent Annual Information Form
available at http://www.sedarplus.com (the "AIF").
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" 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.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
UPDEAFFNAANDFEA
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