VANCOUVER, BC, March 23, 2021
/CNW/ - (TSX: LUC) (BSE: LUC) (Nasdaq Stockholm: LUC)
Lucara Diamond Corp. is pleased to announce the execution of a
mandate for a senior secured project financing package of up to
US$220 million (the "Mandate") to
fund the underground expansion at Lucara's 100% owned Karowe Mine
("Karowe") in Botswana. A
syndicate of five international financial institutions,
including ING Bank N.V. ("ING"), Natixis ("Natixis"), Société
Générale, London Branch ("Société
Générale"), Africa Finance Corporation ("AFC") and Afreximbank
("Afrexim") will act as the Mandated Lead Arrangers ("MLAs"). The
formal Mandate includes a non-binding indicative term sheet for
debt facilities of up to US$220
million (the "Facilities"). Closing of the Facilities
is targeted to be mid-2021, with financing in place for the second
half of 2021. View PDF Version
Eira Thomas, President and CEO commented: "The mandating of five
leading international financial institutions, with strong mining
and metals track records and significant experience in Africa, for the arrangement of +$200 million
senior debt facilities, is a significant achievement for Lucara.
This debt package will supplement cash flows from continued
operations of the Karowe open pit over the next 5 years, extending
Karowe's mine-life out from 2025 until at least 2040. The project
is underpinned by strong economics, is expected to payback in under
three years and contribute more than $4
billion of additional revenues using conservative diamond
pricing assumptions. We are targeting completion of the project
financing package by mid-year, with full project sanction
thereafter.
The interest of top tier financial institutions further
validates Lucara's reputation as a leading, high margin diamond
producer, which has demonstrated resilience throughout the
pandemic. Karowe is highly levered to strengthening diamond
prices and is well positioned to take advantage of the current
market, as we have observed prices recovering to pre-pandemic
levels in early 2021."
The execution of the Mandate is a key milestone in the project
financing process for the Karowe underground expansion, which has
an estimated capital cost of US$514
million and a five-year development period. The
balance of development capital is expected to come from operating
cash flow generated by open pit operations at Karowe during the
development period. The MLAs have commenced detailed due diligence
on all aspects of the financing and Lucara continues to work with
them to conclude the due diligence process in the near term.
Closing of the Facilities is subject to completion of the
customary processes including due diligence, final credit approvals
and execution of final documentation.
Terrafranca Advisory Limited is acting as financial advisor to
the Company. Norton Rose Fulbright LLP is acting as legal
counsel to the Company.
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. 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.
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 the Company is obliged to
make public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency of
the contact person set out above at 2:15pm
Pacific Time on March 23,
2021.
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.
This release may contain forward looking information pertaining
to the following: the timing for an investment decision related to
developing an underground mine at Karowe, the arrangement of a
senior secured project debt financing and the satisfaction of other
conditions to develop an underground mine at Karowe and expected
economics related to the development and operation of the proposed
underground mine. The Company's ability to achieve these
conditions may include but is not limited to: the receipt of all
required authorizations for the development and operation of an
underground mine, the anticipated time to arrange external
financing, the quantum of that financing and that the proposed
terms of any external financing will be satisfactory to the
Company; the ability of the Company's cash flows from operations to
supplement the Company's external financing requirements; the
Company's ability to meet the estimated schedule and budget to
develop underground operations and the accuracy of related
estimates, the production profile at Karowe and the timing to
process ore from underground operations, anticipated changes in
diamond pricing, including trends in supplies and demands and the
potential for stability in the diamond market and diamond pricing;
changes to foreign currency exchange rates; 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 "Risks and Uncertainties" in
the Company's most recent Annual Information Form available at
http://www.sedar.com, as well as changes in general business and
economic conditions, 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.