TIDM0QUI
RNS Number : 4270T
Lucara Diamond Corp
24 November 2021
November 24, 2021
NEWS RELEASE
LUCARA ANNOUNCES OPERATING GUIDANCE FOR 2022
VANCOUVER, November 24, 2021 /CNW/ (LUC - TSX, LUC - BSE, LUC -
Nasdaq Stockholm)
Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to
provide operating guidance for 2022 (all amounts in USD unless
otherwise stated).
2022 OUTLOOK
This section provides management's production and cost estimates
for 2022. 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 2022
------------------------------------------ -----------------------------
Diamond revenue $185 million to $215 million
------------------------------------------ -----------------------------
Diamond sales 300,000 carats to 340,000
carats
------------------------------------------ -----------------------------
Diamonds recovered 300,000 carats to 340,000
carats
------------------------------------------ -----------------------------
Tonnes mined - Ore 3.1 million to 3.5 million
------------------------------------------ -----------------------------
Tonnes mined - Waste 1.5 million to 2.1 million
------------------------------------------ -----------------------------
Tonnes processed - Ore 2.6 million to 2.8 million
------------------------------------------ -----------------------------
Total operating cash costs per tonne $29.50 to $33.50
processed (including (a) to (b) below):
------------------------------------------ -----------------------------
(a) Cash cost per tonne mined (ore and $5.75 to $6.25
waste)
------------------------------------------ -----------------------------
(b) Cash cost per tonne processed $12.00 to $13.00
------------------------------------------ -----------------------------
Botswana G&A expenses, including sales $3.50 to $4.00
and marketing, per tonne processed
------------------------------------------ -----------------------------
Tax rate 0%
------------------------------------------ -----------------------------
Average exchange rate - USD/Pula 11.0
------------------------------------------ -----------------------------
Eira Thomas, President and CEO commented: "The business
environment for diamonds and diamond jewellery is the healthiest
we've seen in several years, spurred on by an improvement in global
supply and demand fundamentals, a trend which is expected to
continue. In 2022, our tenth year of operations at Karowe, Lucara
anticipates producing up to 340,000 carats which will be sold
through its innovative, multi-sales channel approach generating
revenues between $185 and $215 Million. This does not include any
estimated contributions of revenue from large, exceptional diamonds
that have historically formed a regular part of Karowe's production
profile. The completion of a supplemental debt financing package in
2021 to support our underground expansion project was a significant
de-risking milestone for the company and the project, which was $64
Million spent by Q3 2021 and 20% complete. The underground
expansion at Karowe provides access to the richest portion of the
orebody and will extend minelife to at least 2040. The project
remains on schedule and budget, with a forecasted spend of up to
$110 Million in 2022."
REVENUE AND SALES CHANNELS
In 2022, the Company's revenue forecast assumes that 100% of the
carats recovered will come from the higher value M/PK(S) and
EM/PK(S) units within the South Lobe in accordance with the mine
plan, generating revenue between $185 and $215 million in 2022. The
Company will continue to use three different sales channels to
maximize revenue and generate consistent cash flow to support the
Company's operations and its investment in the underground
expansion project. Higher value stones greater than +10.8 carats in
size will continue to enter the manufacturing pipeline at HB,
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 less than 10.8 carats in size will continue, consistent with
the practise from previous years.
MINING AND PROCESSING ASSUMPTIONS
Following the successful project financing for the Karowe
underground expansion project in mid-2021, the open pit mine plan
was revised to extend the life of the open pit into 2026. Centre
lobe material, combined with ore from the underground development
will replace lower grade stockpiles towards the end of the open pit
mine life. In 2022, the Company expects to mine between 4.6 and 5.6
million tonnes, of which ore tonnes mined represent approximately
two-thirds of total tonnes mined. The assumptions for carats
recovered and sold as well as the number of tonnes processed are
consistent with achieved performance in recent years.
UNDERGROUND AND SUSTAINING CAPITAL EXPITURES
In 2022, capital costs for the underground expansion are
expected to be up to $110 million and will focus on the
commencement of shaft sinking activities, the commissioning of
power and detailed engineering for the underground development.
Sustaining capital and project expenditures are expected to be up
to $17 million with a focus on completion of a community sports
facility, dewatering activities and an expansion of the tailings
storage facility.
BOTSWANA TAX RATE
Lucara Botswana's progressive tax rate computation allows for
the immediate deduction of operating costs, including capital
expenditures, in the year in which they are incurred. Based on 2022
revenue guidance of $185 million to $215 million and assuming the
underground development expenditures of $110 million, the tax rate
is expected to be 0% for 2022.
CLARA SALES PLATFORM
Clara, Lucara's 100% owned proprietary, secure, web-based
digital sales platform, continues to grow in terms of volume
transacted and customer participation. The number of buyers on the
platform as of Q3 2021 was 87 and the Company continues to maintain
an active waiting list to manage supply and demand. Platform trials
and discussions with third party suppliers of rough diamonds are
ongoing to build supply, which remains a key objective for 2022 and
beyond. The rationale for a web based digital sales platform for
the transaction of rough diamonds has never been stronger, sparked
by industry's need for increased transparency, global restrictions
on travel, and a new openness to the use of innovation and
technology to create a more efficient supply chain.
On behalf of the Board,
Eira Thomas
President and Chief Executive Officer
Follow Lucara Diamond on Facebook , Twitter , Instagram , and
LinkedIn
For further information, please 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 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 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.
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 24, 2021 at 4:30am 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 impact of COVID-19
pandemic on the Company's operations and cash flows 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 and the potential for the supply agreement with HB
to achieve both higher prices from the sale of polished diamonds
and to provide more regular cash flow than in previous periods;
estimates of variable consideration receivable pursuant to the HB
supply agreement; changes to foreign currency exchange rates;
assumptions and expectations related to the ongoing development of
an underground mining operation at Karowe including associated
capital costs 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
risks and uncertainties described under the heading "Risks and
Uncertainties" in the Company's most recent Annual Information Form
available at http://www.sedar.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" 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.
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END
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November 24, 2021 07:34 ET (12:34 GMT)
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