TIDM0QUI
RNS Number : 0720V
Lucara Diamond Corp
29 November 2019
PRESS RELEASE
LUCARA PROVIDES OPERATING OUTLOOK FOR 2020
VANCOUVER, November 28, 2019 /CNW/ - (LUC - TSX, LUC - BSE, LUC
- Nasdaq Stockholm)
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 $32.00 to $36.00
processed (including (a) to (b) below):
--------------------------------------------- -----------------------------
(a) Cash cost per tonne mined (ore and $4.40 to $4.90
waste)
--------------------------------------------- -----------------------------
(b) Cash cost per tonne processed $11.50 to $12.50
--------------------------------------------- -----------------------------
Botswana general & administrative expenses, $3.00 to $4.00
including sales and marketing expenses,
per tonne processed
--------------------------------------------- -----------------------------
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
Follow Lucara Diamond on Facebook, Twitter, Instagram, and
LinkedIn
For further information, please contact:
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
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCUWRARKNAAUUA
(END) Dow Jones Newswires
November 29, 2019 02:00 ET (07:00 GMT)
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