VANCOUVER, BC, April 6, 2021 /PRNewswire/ -- (TSX: LUC)
(BSE: LUC) (Nasdaq Stockholm: LUC)
Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to
announce that it has entered into a 24-month extension of its
definitive supply agreement with HB Antwerp ("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 account for approximately 70% of
Lucara's annual revenues. Though the Karowe 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. View PDF version
Under the terms of this novel supply agreement with HB, extended
to December 2022, the purchase price
paid for each +10.8 carat rough diamond is 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.
ADVANTAGES:
- Regular cash flow for Lucara using polished pricing
mechanism;
- Potential revenue upside, particularly suited for Lucara's
large, exceptional diamonds;
- Increased tax revenue and additional beneficiation
opportunities for the Government of Botswana; and
- A streamlined supply chain that achieves alignment between
Lucara and HB to maximize the value of each +10.8 carat diamond
produced at Karowe.
Eira Thomas, CEO commented: "The decision to sell our +10.8
carat rough diamonds under a committed supply agreement with HB
beginning in July of 2020 has helped support prices for this
critical segment of our production amidst pricing uncertainty
caused by the ongoing global pandemic. Not only have rough
diamond prices experienced a positive re-bound over the past two
quarters, Lucara is also beginning to see the benefits of this
strategy in accessing a broader marketplace and delivering regular
cash flow based on final polished sales. We believe these early
results warrant an extension of the arrangement for at least 24
months to determine if superior pricing and market stability for
our large, high value diamonds can be sustained longer term,
creating better alignment between all participants and the
establishment of a healthier, more efficient global diamond supply
chain."
Oded Mansori, CEO HB Antwerp:
"More than a supply agreement, this collaboration structurally
embeds a new transparent and sustainable way of working in the
diamond value chain. For the first time, different partners of the
value chain are fully aligned, sharing data and information
throughout the process from mine to consumer."
On behalf of the Board,
Eira Thomas
President and Chief Executive Officer
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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 ANTWERP
HB
Antwerp turns the diamond supply
chain upside down starting with the customer. Using technology,
they bring simplicity and transparency to a typically complex
supply chain. Everything happens in a closed loop called Signum in
Antwerp, backed with the latest
technologies and tracked with blockchain making it 100% transparent
from diamond mine to market.
The information in this release is accurate at the time of
distribution but may be superseded or qualified by subsequent news
releases.
This information is information that Lucara is obliged to make
public pursuant to the EU Market Abuse Regulation. The information
was submitted for publication, through the agency of the contact
persons set out above, on April 6,
2021 at 2:15pm 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, 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, that the agreement will result in
increased revenue and beneficiation opportunities for the
Government of Botswana, 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 those factors discussed
in or referred to under the heading "COVID-19 Global Pandemic" 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.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 and polished 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
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.
CONTACT: 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
Emily Moss / Jos Simson, Tavistock, +44 778 855
4035, lucara@tavistock.co.uk