VANCOUVER, May 7, 2020 /CNW/ - (LUC – TSX, LUC – BSE, LUC –
Nasdaq Stockholm)
Please view PDF version
Lucara Diamond Corp. ("Lucara" or the "Company") today reports
its results for the quarter ended March 31,
2020.
HIGHLIGHTS FOR THE QUARTER ENDED MARCH
31, 2020
- As at March 31, 2020, the Company
had cash and cash equivalents of $27.4
million, an increase of $16.2
million from December 31,
2019. The Company maintained draws totalling $19.0 million on the working capital facility
from Q1 2020. A balance of $31.0
million is available to be drawn for working capital, if
required, subsequent to March 31,
2020. The Company begins the second quarter with a strong
cash position and available liquidity.
- A strong operating environment prevailed at the Karowe Mine in
Q1 and delivered results consistent with the 2020 plan and
budget:
-
- Ore and waste mined of 0.9 million tonnes and 1.2 million
tonnes respectively
- 0.64 million tonnes of ore processed resulting in 91,536 carats
recovered, achieving a recovered grade of 14.3 carats per hundred
tonnes
- 190 Specials (+10.8 carats) were recovered from direct milling
during the first quarter, representing 6.7% weight percentage of
total direct milling recovered carats, in line with mine plan
expectations
- 8 diamonds were recovered greater than 100 carats in
weight
- In early February 2020, an
unbroken 549 carat white diamond of exceptional purity was
recovered from direct milling of ore sourced from the EM/PK(S) unit
of the South Lobe. This diamond was not made available for sale in
Q1.
- Total revenue of $34.1 million
was recognized in Q1 2020 (Q1 2019: $48.7
million) or $396 per carat (Q1
2019: $512 per carat) from the sale
of 86,178 carats (Q1 2019: 95,053 carats). The Q1 2020 tender
represents the smallest planned sale for the year and reflects a
reduction in realized prices in the larger size classes compared to
those achieved from the equivalent period in 2019.
- The Company recorded a net loss of $3.2
million for Q1 2020 resulting in a $0.01 loss per share for the quarter. This
compares to net income of $7.4
million for Q1 2019 and earnings per share of $0.02. A decrease in total revenue had the most
significant impact on the current quarter's results.
- Cash flow from operations in Q1 2020 totalled $2.4 million compared to cash flow from
operations of $10.6 million in Q1
2019, largely due to a weaker pricing environment and a decrease in
revenue between the periods.
- The value of the rough diamonds transacted through the Clara
platform in Q1 2020 was $3.0 million
over six sales, which brings the total value transacted on the
platform between December 2018 and
March 2020 to $12.1 million.
- Operating cash cost(1) per tonne of ore processed
for the three months ended March 31,
2020 was $31.43 per tonne (Q1
2019: $30.52 per tonne), which is
below the initial full year forecast cash cost of $32-$36 per tonne
processed but 3% higher than the comparative quarter last year. The
operating cash cost per tonne processed in Q1 2020 was positively
impacted by a favourable foreign exchange rate and the benefits of
cost optimization efforts undertaken in the second half of 2019,
offset by a 16% decrease in tonnes processed as compared to Q1
2019.
- A continued focus on operational discipline at Karowe has
resulted in a strong operating margin of 49% year to date (Q1 2019:
67%) and adjusted EBITDA(1) year to date of $8.1 million (Q1 2019: $23.4 million). Operating expenses per carat sold
totalled $201 per carat in the three
months ended March 31, 2020, up from
$169 per carat sold in the comparable
period last year. Total carats sold were approximately 10% less by
volume than the same quarter last year (Q1 2020: 86,178 carats
sold; Q1 2019: 95,053 carats sold).
- In January 2020, Lucara entered
into an unprecedented collaboration with Louis Vuitton ("LV"), the famous luxury house,
and the HB Company ("HB"), a diamond manufacturer from Antwerp, to manufacture its historic, record
setting, 1,758 carat Sewelô diamond recovered from the Karowe Mine
in Botswana in April 2019. Lucara will receive an upfront
non-material payment for the Sewelô and retain a 50% interest in
the individual polished diamonds that result. Further, 5% of all
retail sales proceeds generated from this historic collection will
be invested directly back into Botswana on community-based initiatives
undertaken by Lucara.
(1) See
Non-IFRS measures
|
Eira Thomas, President & CEO commented: "I am extremely
proud and heartened by the efforts of our employees, contractors,
partner communities and governments who have all come together and
taken swift action in support of Lucara's COVID-19 crisis
management strategy, designed to keep our people safe and our mine
operating. Declared an essential service by the government on
April 2, Karowe continues to operate
safely and at full production. Demand for our product, however,
continues to be weak and Lucara is necessarily focused on cost
management and capital discipline through this period of
uncertainty. To this end, Lucara's capital spending program for
2020 is now being re-scoped to focus on critical path elements,
largely in support of our ongoing, underground expansion
program. As a reminder, Lucara entered this crisis with a
strong balance sheet and no debt. As a further positive
development, Lucara's $50 million
credit facility with the Bank of Nova
Scotia was recently renewed for another year, providing the
Company with additional flexibility and liquidity to continue to
effectively manage our business through 2020. Though our
near-term outlook on diamond prices remains uncertain, global rough
diamond production curtailments combined with early indications of
polished diamond demand recovery in Asia provide some optimism that demand will
improve in the latter half of the year."
COVID-19 RESPONSE & RECENT DEVELOPMENTS
In March 2020, the Company
implemented a crisis management strategy in relation to COVID-19,
to protect the health and well-being of its employees in
Botswana and Canada and to protect the financial well-being
of the business. The Karowe Mine remains fully operational, under
new measures and guidelines implemented by the Government of
Botswana in late March 2020. These measures designate mining as an
essential service in Botswana and
include increased travel restrictions, reduced overall staffing
levels and increased and appropriate social distancing. Employees
who are able to work remotely are doing so. As travel restrictions
relating to COVID-19 are expected to remain in place for an unknown
period, the Company's ability to complete tenders in Botswana is expected to be impacted. As a
temporary measure, the Government of Botswana has granted Lucara permission to hold
diamond sales in Antwerp, Belgium
if required.
Lucara completed the first of four planned diamond tenders for
the year on March 5th, and
achieved sales prices within 1% of forecast, however, diamond
prices have since deteriorated in response to weaker demand as
COVID-19 has continued to spread globally. The full impact of
COVID-19 on Lucara's operations and production outlook for 2020
remains highly uncertain, and as a result, the Company has
suspended its 2020 guidance until further notice.
Lucara's second quarter tender, originally scheduled for
mid-May 2020, has been postponed and
will be re-scheduled to a more appropriate date in the near-term,
as market conditions are evaluated. The Clara digital sales
platform, which allows for buyers to place orders without
physically viewing the goods and to purchase only the diamonds they
need on a stone by stone basis, continues to hold
sales. Travel restrictions in Botswana, South
Africa, India and
Europe have caused disruptions
during April preventing some deliveries from taking place.
Lucara's planned capital spending program for 2020 is largely
focused on the initiation of our Karowe underground expansion
project and was previously designed to ramp up in Q3, funded
entirely from cash-flow, under a budget of $53 million. Given the present uncertainty
related to our 2020 revenue forecast, this program is being
re-scoped and reduced to focus on critical-path items through the
remainder of the year. The underground expansion program has an
estimated capital cost of $514
million and a five year period of development. The Company
expects to finance part of the capital cost with debt and the
balance from cash flow generated by operations. In light of
the uncertainty resulting from the COVID-19 pandemic, the Company
is also reviewing its original estimates and assumptions for the
quantum and timing of cash flows expected from the current
operations against the anticipated financing requirement for the
underground expansion program.
The Company's $50 million
revolving term working capital facility with the Bank of
Nova Scotia has been extended by
one year to May 5, 2021. The
Bank of Nova Scotia has first
ranking security by way of a charge over the Company's Karowe
assets and a guarantee by the Company's subsidiaries, which hold
the Karowe assets. As part of the extension, and until Lucara
obtains greater clarity on its cash flow projections in the
short-term, Lucara has agreed to limit capital expenditures related
to the underground expansion project. The extension of this
facility provides an important source of liquidity to Lucara during
a period of significant uncertainty in global
markets.
FINANCIAL HIGHLIGHTS
|
|
|
Three months ended
March 31
|
In millions of
U.S. dollars, except carats or otherwise noted
|
2020
|
2019
|
|
|
|
Revenues
|
$ 34.1
|
$ 48.7
|
Net income (loss) for
the period
|
(3.2)
|
7.4
|
Earnings (loss) per
share (basic and diluted)
|
(0.01)
|
0.02
|
Operating cash flow
per share*
|
0.02
|
0.05
|
Cash on
hand
|
27.4
|
17.9
|
Amounts drawn on the
working capital facility
|
19.0
|
Nil
|
|
|
|
Average price per
carat sold ($/carat)*
|
396
|
512
|
Operating expenses
per carat sold ($/carat)*
|
201
|
169
|
Operating margin per
carat sold ($/carat)*
|
195
|
343
|
Carats
sold
|
86,178
|
95,053
|
(*) Operating cash
flow per share, average price per carat sold, operating expenses
per carat sold and operating margin per carat sold are Non-IFRS
measures.
|
The Company recognized revenue of $34.1
million or $396 per carat from
the sale of 86,178 carats in the first quarter of 2020, inclusive
of all diamonds sold on Clara. The average price per carat sold was
$396 per carat yielding an operating
margin of $195 per carat (49%). The
number of carats sold in Q1 2020 decreased by 10% compared to Q1
2019. The decrease in the average price per carat sold and in total
revenue achieved in Q1 2020 was due to a combination of variability
in quality of the stones available for sale in the Q1 2020 tender
along with lower achieved prices similar to those realized in
mid-2019.
During the first quarter, the Company entered into a binding
term sheet with Louis Vuitton and
the HB Company to manufacture the historic 1,758 carat Sewelô
diamond recovered in April 2019.
Sewelô, which means "rare find" in Setswana, is the second, +1,000
carat diamond recovered from Karowe in four years and the largest
ever recovered in Botswana. The
diamond has been characterized as near gem of variable quality,
with recent analysis confirming that it also includes domains of
higher-quality white gem. Lucara believes that the full potential
of the Sewelô will only be revealed once polished. The
purpose of this unprecedented collaboration between a miner, a
cutting edge manufacturer and a large luxury brand will be the
planning, cutting and polishing of a collection of diamonds from
Sewelô.
While most of Karowe's diamond production is sold through sales
tenders, beginning in late 2018 certain stones from Karowe's
production sized between 1 and 10 carats and of better quality were
offered for sale on Clara, Lucara's revolutionary, web based,
digital sales platform that allows customers to purchase rough
diamonds individually, based on specific demand. Six sales were
completed on the platform during the first quarter of 2020 with
$3.0 million in value transacted. The
customer base of Clara grew significantly in the fourth quarter of
2019 and continues to grow at a strong pace with an increase of 19%
in the number of participants. The addition of third-party
production to the platform has been delayed due to significant
disruptions resulting from the COVID-19 pandemic. While this
remains an objective for 2020, the nature and timing of this
onboarding is presently uncertain.
Operating expenses increased from $16.1
million in the three months ended March 31, 2019 to $17.3
million in the three months ended March 31, 2020 mainly due to an increase in the
average cost per tonne mined due to lower volumes of total tonnes
mined. Waste tonnes mined decreased as compared to the same period
in 2019 as the significant waste stripping campaign ("Cut 2") which
started in 2017 was substantially completed in Q1 2019. The
combination of a decrease in the number of carats sold and an
increase in operating expenses resulted in an overall increase in
the operating expense per carat sold from $169/carat in the three months ended March 31, 2019 to $201/carat in the three months ended March 31, 2020.
Depletion and amortization, a non-cash expense, decreased from
$11.6 million for the three months
ended March 31, 2019 to $10.5 million for the three months ended
March 31, 2020 due to a 10% lower
volume of carats sold. The decrease in revenue in the first quarter
of 2020 compared to the first quarter of 2019 generated a similar
decrease to Adjusted Earnings Before Interest, Tax, Depletion and
Amortization ("Adjusted EBITDA") (*Non-IFRS measure), net
income and earnings per share when comparing results from each
quarter.
Operations in the first quarter of 2020 were consistent with the
strong, stable operating environment achieved at the Karowe Mine in
2019. Ore tonnes mined (0.9 million tonnes) and waste tonnes mined
(1.2 million tonnes) were on plan for the first quarter. The plant
processed 0.64 million tonnes during the first quarter, also
consistent with the 2020 plan. The total tonnes processed in 2020
are expected to be slightly less than the record 2.8 million tonnes
processed in 2019 due to several planned multi-day shut-downs to
upgrade the XRT technology which is a key part of the recovery
circuit at the Karowe Mine. Despite the challenges presented by the
COVID-19 pandemic, as at May 7, 2020
the Karowe Mine continues to operate at full production levels,
with social distancing and other critical health and safety
measures designed to limit the spread of the virus being
observed.
A recovery in the pricing environment for both polished and
rough diamonds which began in late-2019 has been severely impacted
by the COVID-19 pandemic and as a result, several large and small
diamond producers have placed their operations on care &
maintenance and deferred or cancelled regularly scheduled sales due
to economic uncertainties and logistical challenges resulting from
an unprecedented, global "lock-down". Karowe's annual production
represents a small fraction of the global rough diamond supply that
is mined and sold each year. Buyers of Karowe diamonds do not have
firm purchasing commitments so they are free to bid only on the
diamonds which are of interest to them. This system benefits both
Lucara and its customers and typically results in competitive
pricing for Karowe goods. Diamonds mined from Karowe are sold
either through a quarterly tender in Botswana or through the Clara digital sales
platform. The Government of Botswana has granted temporary permission to
the Company to conduct sales in Antwerp,
Belgium and the second quarter tender which was originally
scheduled to close mid-May in Botswana is expected to be rescheduled and
will be held in Antwerp, as soon
as market conditions permit. Clara has continued sales during
the global "lock-down" but has encountered some difficulties in
delivering certain goods purchased due to restrictions on travel
and non-essential work implemented by many countries. However,
these restrictions are anticipated to be scaled-back in many
countries in the coming weeks. Clara represents a unique
opportunity to purchase rough diamonds without the requirement to
travel.
QUARTERLY RESULTS OF OPERATIONS – KAROWE MINE, BOTSWANA
|
UNIT
|
Q1-20
|
Q4-19
|
Q3-19
|
Q2-19
|
Q1-19
|
Sales
|
|
|
|
|
|
|
Revenues generated
from sales tenders conducted in the quarter
|
US$M
|
33.8
|
56.0
|
45.3
|
42.5
|
48.7
|
Carats sold for
revenues recognized during the period
|
Carats
|
86,010
|
98,547
|
116,200
|
101,931
|
95,057
|
Average price per
carat for proceeds received during the period
|
US$
|
393
|
568
|
390
|
417
|
512
|
Production
|
|
|
|
|
|
|
Tonnes mined
(ore)
|
Tonnes
|
878,087
|
694,591
|
823,875
|
773,861
|
1,011,048
|
Tonnes mined
(waste)
|
Tonnes
|
1,199,660
|
740,593
|
1,489,668
|
1,826,972
|
2,485,548
|
Tonnes
processed
|
Tonnes
|
639,430
|
647,502
|
680,665
|
713,037
|
763,313
|
Average grade
processed
|
cpht (*)
|
14.3
|
13.31
|
13.92
|
14.23
|
15.94
|
Carats
recovered
|
Carats
|
91,536
|
86,4221
|
104,9902
|
109,3123
|
132,3364
|
Costs
|
|
|
|
|
|
|
Operating costs per
carats sold (see Non-IFRS measures)
|
US$
|
201
|
209
|
201
|
174
|
169
|
Sustaining capital
expenditures
|
US$M
|
2.4
|
13.0
|
0.7
|
1.4
|
2.4
|
Underground expansion
project
|
US$M
|
1.7
|
-
|
-
|
-
|
-
|
(*) carats per
hundred tonnes
|
|
(1)
|
Carats recovered
during the period included 273 carats recovered from re-processing
historic recovery tailings from previous milling and are excluded
from the average grade processed.
|
|
(2)
|
Carats recovered
during the period included 10,646 carats recovered from
re-processing historic recovery tailings from previous milling and
are excluded from the average grade processed.
|
|
(3)
|
Carats recovered
during the period included 8,172 carats recovered from
re-processing historic recovery tailings from previous milling and
are excluded from the average grade processed.
|
|
(4)
|
Carats recovered
during the period included 10,899 carats recovered from
re-processing historic recovery tailings from previous milling and
are excluded from the average grade processed.
|
FIRST QUARTER OVERVIEW – KAROWE MINE
Safety: Karowe had no lost time injuries during the
three months ended March 31, 2020
resulting in a twelve-month rolling Lost Time Injury Frequency Rate
of 0.
Production: Ore and waste mined during the three months
ended March 31, 2020 totaled 0.9
million tonnes and 1.2 million tonnes respectively. Tonnage
processed was 0.64 million tonnes, with a total of 91,536 carats
recovered. During Q1 2020, ore processed was almost entirely from
the South lobe and a total of 190 Specials were recovered including
8 diamonds greater than 100 carats in weight. Recovered
Specials equated to 6.7% weight percentage of total recovered
carats from ore processed during Q1 2020, consistent with
expectations.
Overall performance during the first quarter remains consistent
with the strong operational results achieved over the past two
years. Processing capacity was slightly lower in Q1 2020 compared
to previous quarters due to a planned extended shutdown in early
March for improvements to the XRT technology in the process plant.
Continuous improvements to maintenance scheduling and better
availability of equipment offset some of the additional downtime
required in Q1 2020. Mining and processing results were on plan
during Q1 2020.
Karowe's operating cash cost: Karowe's year to date
operating cash cost (*Non-IFRS measure) was $31.43 per tonne of ore processed (YTD 2019:
$30.52 per tonne of ore processed)
below the initial full year forecast of $32-$36 per tonne
processed, and approximately 3% higher than the same period in
2019. The current period result includes the impact of a 5%
depreciation of the Botswana Pula compared to the US Dollar
reporting currency, and realized cost savings following a cost
optimization process in the second-half of 2019, offset by a 16%
decrease in tonnes processed as compared to Q1 2019.
Significant diamond recoveries: In early February 2020, an unbroken 549 carat white
diamond of exceptional purity was mined from the EM/PK(S) unit
of the South Lobe and was recovered in the Mega Diamond Recovery
XRT circuit. A decision on the sale of this special diamond will be
undertaken in due course.
KAROWE UNDERGROUND UPDATE
On November 4, 2019, the Company
announced the results of a Feasibility Study for an underground
mine at Karowe. A copy of the Company's news release and the
related technical report prepared pursuant to the requirements of
NI 43-101 – Standards of Disclosure for Mineral Projects were filed
on Sedar (www.sedar.com) and are available on the Company's website
at: www.lucaradiamond.com.
In November 2019, Lucara's Board
of Directors approved a $53 million
capital program for the Karowe underground expansion project, with
the majority of the budget scheduled to be spent in the latter part
of the year and funded through the cash flow from current
operations. During Q1 2020, $1.7
million was spent on project execution activities including
detailed engineering and design work and early procurement
initiatives.
Given the uncertainty in global markets resulting from COVID-19,
the originally planned capital budget will be reduced until more
certainty exists around Lucara's cash flow projections. The
2020 program is now being re-scoped to focus on critical-path items
for the remainder of the year. Activities are focused on
procurement of long lead time equipment, engineering and design
work, physical site activity using local contractors for site
preparation and geotechnical studies.
The Company is continuing to explore debt financing options for
the underground expansion for those amounts which are expected to
exceed the Company's cash flow from operations during the
construction period. The underground expansion program has an
estimated capital cost of $514
million and a five year period of development. In light of
the uncertainty resulting from the COVID-19 pandemic, the Company
is also reviewing its original estimates and assumptions for the
quantum and timing of cash flows expected from the current
operations against the anticipated financing requirement for the
underground expansion program.
CLARA
Further sales on Clara are planned for the remainder of 2020,
subject to the existence of demand and Clara's ability to complete
delivery of the stones purchased. The timing to onboard
third-party production, a key objective for 2020, is uncertain
presently due to the unprecedented global upheaval which has
resulted in response to the COVID-19 pandemic.
2020 OUTLOOK
This section of the press release provides management's
production and cost estimates for 2020. These are
"forward-looking statements" and subject to the cautionary note
regarding the risks associated with forward-looking statements.
On March 31, 2020, the Company
announced the suspension of its 2020 guidance until further
notice. The full impact of the COVID-19 pandemic on Lucara's
operations and production outlook for 2020 remains highly uncertain
and may remain that way for several months. Further guidance
will be released as the impact of COVID-19 becomes known.
The global diamond industry is experiencing the widespread
impacts of COVID-19 throughout the value chain, manifested as fewer
sales, weaker pricing, logistical challenges/delays in the movement
of goods and people and, production curtailments at several
mines. Following the Company's first quarterly tender which
closed on March 5, 2020, diamond
prices have continued to deteriorate in response to weaker demand
as COVID-19 has continued to spread globally and governments have
implemented a variety of restrictions on the movement of people and
goods in an effort to curtail its spread. While full production
levels are currently being sustained at the Karowe Diamond Mine,
Lucara cannot predict if future changes or regulations implemented
by the Government of Botswana will
affect its operations in the near term. As a temporary measure, in
response to the COVID-19 crisis, the Government of Botswana has granted Lucara permission to hold
diamond sales in Antwerp, Belgium
if required.
Lucara's second quarter tender, originally scheduled for
mid-May 2020, has been postponed and
will likely be re-scheduled in the coming weeks, pending an
evaluation of the market conditions closer to the time. Sales are
continuing on the Clara platform, although disruptions have been
experienced during April due to certain travel restrictions in
Botswana, South Africa, India and Europe which have prevented some deliveries
from taking place.
Lucara's capital spending program for 2020 is also being
re-scoped to focus on critical-path items through the remainder of
the year. Most of the previously approved capital spend of
$53 million for the Karowe
underground expansion project was scheduled to be invested in the
latter part of the year and funded through cash flow from
operations. Given the uncertainty in global markets resulting
from COVID-19, these capital expenditures will be reduced until
more certainty exists around Lucara's cash flow projections.
CONFERENCE CALL
The Company will host a conference call and webcast to discuss
the results on Friday, May 8, 2020 at
6:00 a.m. Pacific, 9:00 a.m. Eastern, 2:00
p.m. UK, 3:00 p.m. CET.
CONFERENCE CALL:
Please call in 10 minutes before the
conference call starts and stay on the line (an operator will be
available to assist you).
Conference ID:
36146504 / Lucara Diamond
Dial-In Numbers:
Toll-Free Participant
Dial-In North America
|
(+1) 888 390
0546
|
All International
Participant Dial-In
|
(+1) 778 383
7413
|
Webcast:
To view the live webcast presentation, please
log on using this direct link:
https://produceredition.webcasts.com/starthere.jsp?ei=1308278&tp_key=664b5059a3
The presentation slideshow will also be available in PDF format
for download from the Lucara website www.lucaradiamond.com shortly
before the conference call.
Conference Replay:
A replay of the telephone
conference will be available two hours after the completion of the
call until May 15, 2020.
Replay number (Toll
Free North America)
|
(+1) 888 390
0541
|
Replay number
(International)
|
(+1) 416 764
8677
|
The pass code for the replay is: 146504#
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 CLARA
Clara Diamond Solutions Limited Partnership (Clara), wholly
owned by Lucara Diamond Corp, is 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.
The information in this release is accurate at the time of
distribution but may be superseded or qualified by subsequent news
releases.
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 May 7, 2020 at 2:00pm Pacific Time.
NON-IFRS MEASURES
This news release refers to certain financial measures, such as
operating cash flow per share, adjusted EBITDA, average price per
carat sold, operating cost per carat sold, operating margin per
carat sold and operating cost per tonne of ore processed which are
not measures recognized under IFRS and do not have a standardized
meaning prescribed by IFRS. These measures may differ from
those made by other corporations and accordingly may not be
comparable to such measures as reported by other
corporations. These measures have been derived from the
Company's financial statements, and applied on a consistent basis,
because the Company believes they are of assistance in the
understanding of the results of operations and financial
position. Please refer to the Company's MD&A for the
first quarter, 2020 for an explanation of non-IFRS measures
used.
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 impact of COVID-19 on
the Company's cash flows and operations 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;
changes to foreign currency exchange rates; assumptions and
expectations related to the possible development of an underground
mining operation at Karowe including associated capital costs,
financing strategies 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
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 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.
SOURCE Lucara Diamond Corp.