VANCOUVER, British Columbia,
Nov. 28, 2019 /CNW/ - (LUC – TSX, LUC
– BSE, LUC – Nasdaq Stockholm)
Please view PDF version of News Release.
Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to
provide operating guidance for 2020 (all amounts in US Dollars
unless otherwise stated).
2020 HIGHLIGHTS
- Revenue is forecast to be between $180
million and $210 million;
- A capital expenditure of up to $53
million has been approved for early works related to a
proposed underground mine at the Karowe Diamond Mine. An
investment decision, subject to receipt of all required
authorizations and the arrangement of financing, is expected in H2
2020;
- Karowe 2020 operating cash costs are forecast to be between
$32.00 - $36.00 per tonne processed;
- Ore mined is expected to be between 3.5 million and 3.9 million
tonnes;
- Waste mining is expected to be between 3.6 million and 4.2
million tonnes;
- Tonnes processed is expected to be between 2.5 million and 2.8
million tonnes, consistent with the strong operating performance
achieved in 2018 and 2019;
- Diamond recoveries are expected to be between 370,000 carats
and 410,000 carats; diamonds sold are expected to be between
350,000 carats and 390,000 carats.
Eira Thomas, President & CEO commented: "Building upon the
strong operating performance achieved in 2019, Lucara will continue
to focus in 2020 on optimizing the base business, growing Clara by
adding third party production to the platform and preparing for an
underground expansion at Karowe following the announcement of a
positive feasibility study earlier this month. Anticipated
cash flow from operations in 2020 should allow us to pursue early
works which are critical to the underground development schedule,
while at the same time allowing us to leverage our balance sheet to
finance the project in a cost-effective manner."
Karowe Mine – Diamond Sales,
Production and Cost Outlook for 2020:
Karowe Mine (all
amounts in US Dollars)
|
Full Year
2020
|
Diamond
revenue
|
$180 million to $210
million
|
Diamond
sales
|
350,000 carats to
390,000 carats
|
Diamonds
recovered
|
370,000 carats to
410,000 carats
|
Tonnes mined –
Ore
|
3.5 million to 3.9
million
|
Tonnes mined –
Waste
|
3.6 million to 4.2
million
|
Tonnes processed –
Ore
|
2.5 million to 2.8
million
|
Total operating cash
costs per tonne processed (including (a) to (b)
below):
|
$32.00 to
$36.00
|
(a) Cash
cost per tonne mined (ore and waste)
|
$4.40 to
$4.90
|
(b) Cash
cost per tonne processed
|
$11.50 to
$12.50
|
Botswana general
& administrative expenses, including sales and
marketing expenses, per tonne processed
|
$3.00 to
$4.00
|
Tax rate
|
22%
|
Average exchange rate
– USD/Pula
|
10.5
|
Diamond Revenue
In 2020, the Company forecasts
revenues between $180 million and
$210 million, as the proportion of
carats recovered from the higher grade MP/KS and EM/PK(S) units
increases. These projections include "Specials" which are
diamonds that are 10.8 carats and larger but exclude the sale of
any truly unique diamonds such as the 1,109 carat Lesedi la Rona and the 813 carat
Constellation. Specials are consistently recovered from the
Karowe diamond mine and contribute a significant percentage of the
Company's annual revenue. Diamonds recovered are expected to
be between 370,000 carats and 410,000 carats and diamonds sold are
expected to be between 350,000 carats and 390,000 carats.
Production Estimates and Costs
The Company expects to
mine between 3.5 million to 3.9 million tonnes of ore and between
3.6 and 4.2 million tonnes of waste. The 2020 estimated cash
cost per tonne of ore processed is expected to be between
$32.00 and $36.00. The cost per tonne mined is
expected to be between $4.40 and
$4.90 and the estimated processing
cost per tonne processed is expected to be between $11.50 and $12.50,
a reflection of optimization work and strong operation performance
in the plant.
Tax Rates
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 2019 revenue guidance of $180
million to $210 million the
expected tax rate is 22% for 2020 but could decrease depending on
the amount and timing of capital expenditures during the year.
Underground Development Project
A budget of up to $53 million has
been approved for early works related to a proposed underground
mine at the Karowe Diamond Mine. An investment decision,
subject to receipt of all required authorizations and the
arrangement of financing, is expected in H2 2020. Following the
positive results of a feasibility study announced on November 4, 2019 and based on the Company's
ability to fund these initial capital expenditures from operating
cash flow a program of early works, including detailed engineering
and design work has been approved to mitigate key risks related to
schedule.
Sustaining Capital, Maintenance Projects and Community
Investment
Sustaining capital and project expenditures are expected to be up
to $25.0 million in 2020, including
expenditures associated with the construction of an additional
slimes dam (this is a multi-year project), upgrades to the XRT
recovery circuit and a provision for the implementation of body
scanning technology to enhance security which had originally been
planned for 2019, subject to receipt of the regulatory
approval. In addition, Lucara has committed to several
community investments and optimization initiatives in 2020.
Clara Digital Sales Platform
Following an inaugural diamond sale in December 2018 through Clara Diamond Solutions,
its 100% owned digital sales platform, diamond sales through Clara
were held with increasing frequency during 2019 and the customer
base increased to 27 participants. Further growth is expected
through 2020 as more supply is made available through the platform,
balanced with demand from the customers using the platform.
Third-party production should complement the diamonds from Karowe
which are sold through the platform and should support increased
transaction volumes through 2020.
Eira Thomas
President and Chief Executive Officer
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Qualified Person ("QP")
Dr. John P. Armstrong, Ph.D. P.
Geol., the Company's Vice-President, Technical Services and a QP as
that term is defined in National Instrument 43-101 ("NI 43-101")
has reviewed and approved the contents of this news release.
The results of the Karowe Underground Feasibility Study
announced on November 4, 2019 will be
summarized in a Technical Report prepared pursuant to the
guidelines of NI 43-101. This technical report will be filed
on or before December 19, 2019 on
SEDAR (www.sedar.com) and will also be available on the Company's
website (www.lucaradiamond.com).
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.
ABOUT CLARA
Clara Diamond Solutions (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 in this release is subject to the disclosure
requirements of the Company under the EU Market Abuse Regulation.
This information was publicly communicated on November 28, 2019 at 2:00 pm 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: estimates of the Company's
production and sales volumes for the Karowe Mine, including
associated cash flows consisting of revenues, expenses and per unit
costs as well as capital projects community investments and
optimization initiatives; the use of capital for early works
related to a possible underground mine development and that those
early works could mitigate key schedule risks; the timing for an
investment decision and the conditions to development of an
underground mine, which may include but which are not limited to:
the receipt of all required authorizations and the arrangement of
financing; the schedule of development of the underground, the
production profile at Karowe and 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; the timing and ability of
management to further commercialize the Clara digital sales
platform, the impact of adding third-party production to the
platform, management's expectations regarding the frequency of
sales, the number of participants at each sale and the impact those
items could have on the growth and success of the platform 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.
North America, Christine Warner, Investor Relations &
Communications, +1 604 689-7842 | info@lucaradiamond.com;
Sweden, Robert Eriksson, Investor Relations, +46 701
112615 | reriksson@rive6.ch; UK Public Relations, Emily Moss / Jos Simpson, Tavistock, +447788554035 |
lucara@tavistock.co.uk