Lucara Announces Karowe Underground Expansion Project Update

TSX: LUC) (BSE: LUC) (Nasdaq Stockholm: LUC)

Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to provide an update on the Karowe Underground Expansion project (the "UGP"). The Karowe UGP is planned to extend the mine life to at least 2040 mining predominately from the highest value EM/PK(S) unit, and is forecasted to contribute approximately $4 billion in additional revenues, using conservative diamond prices, starting in 2026. Management will be providing a presentation on the Karowe UGP update during the Lucara Q2 2021 results conference call and webcast on Wednesday August 11 at 10:00am ET / 3:00pm BST . All figures presented are in US dollars, unless otherwise stated. Please view PDF version .

HIGHLIGHTS :

  • The Karowe UGP is in a fully financed position with the funds to be provided from the $220 million senior debt facilities package ( July 12, 2021 ), the recently closed equity financing of C$41.4 million ( July 15, 2021 ), and the projected cash flows from the Karowe open pit mine, during the underground construction period
  • Although COVID-19 related delays have impacted the original schedule, no material variances between the 2019 feasibility study ("2019 FS") and current project design have resulted following the completion of detailed design and engineering work undertaken in 2020 and 2021
  • Total capital expenditures, including contingency have increased marginally by approximately 4%, to $534 million , due to the increase in the production shaft diameter and additional mine development
  • $51.4 million has been spent to date out of the total budget, primarily on engineering and procurement of long lead items; total planned spend for 2021 is up to $120 million
  • The schedule to 75% of full production has increased by 1.3 years, driven mainly by COVID-19 related delays to commence the shaft pre-sinking, and additional planned time for development
  • Open pit mining operations have been adjusted to limit the risk of production shortfalls during the ramp up of the Underground mine operations in 2026
  • Mobilization of shaft sinking teams commenced in late Q2 2021, with pre-sinking activities scheduled in Q3 2021
  • Mine shaft civil works are underway at the shaft collar boxcuts, hoist houses and hoist foundations
  • Construction completed of a generator pad for temporary diesel power generation to support shaft sinking in advance of a power line upgrade into the site
  • A Self-build agreement has been signed with Botswana Power Corporation for construction of two substations and a 29 km 132kV transmission line upgrade; substation contracts have been awarded
  • Phase 1 of the camp construction completed allowing for 100 of the 200 person camp
  • All necessary permits, including a mining license extension to 2046 have been obtained to support all construction and production activities
  • Lucara has adopted IFC performance Standards and the World Bank Group's Environmental, Health, and Safety Guidelines: Mining; the development of the UGP adheres to Equator Principles

Eira Thomas, CEO commented: "Lucara has made tremendous progress on the Karowe underground expansion project over the last eighteen months, despite the challenges imposed by the global pandemic. The project is fully financed, allowing us to move into high gear during the second half of the year. Using conservative diamond price assumptions, the project delivers strong economics projected to pay back capital in under three years and add approximately $4 billion in revenues from an extended mine life out to at least 2040. The project also comes at a time when the outlook for the diamond market is stronger than it has been for many years representing an exciting growth opportunity for our shareholders and stakeholders in Botswana ."

The COVID-19 pandemic has impacted the UGP project schedule, however, no material variances between the 2019 FS ( link to news release ) and the current execution plan have resulted. Rather, during this period in 2020 and 2021, all critical path items were addressed and a concerted effort was placed on detailed design, engineering and procurement which have helped to significantly de-risk the project. Out of the total capital budget, the Company has spent $51.4 million on project execution activities through 2020 until the end of June 2021 , including shaft and geotechnical engineering, procurement of long lead time and essential shaft sinking items, surface infrastructure and construction activities, bulk power supply power line engineering and procurement. Mobilization of the shaft pre-sink team commenced in late Q2 2021 with shaft pre-sinking on track to commence in mid Q3 2021. Open pit mining operations have been adjusted to limit the risk of production shortfalls during the ramp up of the Underground mine operations commencing in H1 2026. The budgeted spend on underground expansion activities in 2021 is up to $120 million .

Please refer to the aerial images of the UG expansion project area ( image attached ) for an overview of the site general arrangement and construction activity to early June 2021 .

Mining Method

The Karowe Mine is an existing conventional drill and blast open pit operation, with diesel excavators and trucks providing an average annual 2.6 million tonnes of kimberlite feed to the mill. The open pit mine operation is expected to terminate mid-2026, ending at an elevation of approximately 700 metres above sea level ("masl").

The Karowe UGP is targeting the substantial resources remaining below the economic extents of the open pit in the South Lobe. A 7,200 tonne per day shaft operation utilizing long hole shrinkage ("LHS") mining will provide an additional 13 years of mine life to the Karowe operation after a five year construction period. The mine will be accessed from a 767 metre deep production shaft, 8.5 metres in diameter, driven from surface and will be equipped with two 21- tonne skips for production hoisting and a service cage for man and material movement through the mine. This shaft will also serve as the main fresh air intake to the mine. A second shaft, 6.0 metre in diameter, driven 733 metres deep from surface, will form the main ventilation exhaust pathway.

The LHS method is planned to systematically drill and blast the entire lobe on a vertical retreat basis. In LHS, a significant proportion of the blasted muck is left in the stope during blasting and stoping to stabilize the host rock with only the swell extracted during the drill and blast phase. Mucking will take place from draw points from the 310L (310 masl) extraction level. Once the column is fully blasted, the stope will be drawn empty by mucking the draw points. The bottom-up approach of the LHS mining method takes advantage of the higher value EM/PK(S) kimberlite unit at depth in the South Lobe at Karowe, and balances high initial capital costs with low operating costs while de-risking the project with respect to the geotechnical and hydrogeological aspects of the host rocks.

LHS Benefits: Early Access to High Value EM/PK(S) Feed

Selection of the LHS mining method brings several advantages during the first years of underground operations at Karowe, namely: i) access to the highest value portion of the lower South Lobe, ii) minimal dilution as mining occurs in competent granite host rock, and iii) underground development can be done simultaneously with open pit operations. Volumetrically the EM/PK(S) unit forms the dominant rock type that will be extracted during the early stage of the underground operations. Over 90% of the recoverable carats between the 310 and 400 levels are attributable to the EM/PK(S) which has a demonstrably coarse diamond size frequency distribution and is a significant source of large high value diamonds from current open pit operations.

Karowe has produced 3 diamonds in excess of 1,000 carats, each of which has been recovered from processing of the EM/PK(S) kimberlite (1,109 carat Lesedi La Rona , Nov. 2015 ; 1,758 carat Sewelô, April 2019 ; 1,174 carat June 2021 ) in addition to top white gem diamonds (549 carat Sethunya, Feb 2020 , 813 carat Constellation, Nov 2015 ). Production runs of EM/PK(S) have exceeded the modelled weight percent of +10.8 carat diamonds for the FS 2019 SFD model (7.9% weight percent +10.8 carat). In 2021, two production runs of EM/PK(S) have exceeded 12% weight percent +10.8 carat diamonds, along with the recovery of large gem quality diamonds of 470 carats ( June 7, 2021 ) and 1,174 carats ( June 22, 2021 ) as well as numerous +50 carat white gems. The continued strong resource performance and recovery of large diamonds reinforces the significance of the EM/PK(S) as an important economic driver for the underground mine at Karowe.

Cost and Schedule Update

A revised project cost and schedule has been developed that captures the detailed engineering and design work through 2020 until May 2021 , incorporating all changes, improvements, and COVID-19 related delays. Overall capital expenditures, including contingency have increased marginally by approximately 4%, to $534 million , driven by the increase to the production shaft diameter and additional mine development (see " Shaft and Mining " below). Through 2020 to the end of Q2 2021, the Company has spent $51.4 million of the total budget (Table 1) on project execution activities.  Total expenditures on the UGP in 2021 are expected to be up to $120 million . The schedule to 75% of full production has increased by 1.3 years, driven mainly by COVID-19 related delays to commence the shaft pre-sinking, and additional planned time for shaft station break-outs and ground support. The open pit mining schedule has been adjusted to push the open pit to 2026, with mill throughput maintained at 2.6 million tonnes per annum. Underground operation parameters with respect to waste and ore tonnes mined, processed tonnes, recoverable diamond grade, recovered carats and diamond pricing assumptions are unchanged from the 2019 FS study.

Table 1 – Comparison of 2019 FS vs 2021 Base Plan


2019 FS

2021 Base Case

Capital Costs

Pre-Production
($ million)

Pre-Production
($ million)

Mining

321.7

309.4

Bulk Earthworks

18.98

18.1

Process Plant

0.1

0.1

Onsite Infrastructure

5.9

13.2

Buildings & Facilities

1.6

1.1

Offsite Infrastructure

19.6

23.2

Project Indirects

47.7

55.1

Owner's Costs

46.9

53.3

Subtotal

462.48

473.5

Contingency

51.4

60.5

Total Capital Costs

513.88

534.0

Table 2 – High Level Timetable

Item

Start

Complete

Camp Phase 1 (100 rooms)

Q1 2021

Q2 2021

Bulk power supply

Q3 2021

Q4 2022

Shaft Pre-sink

Q3 2021

Q2 2022

Change over to Main sink

Q2 2022

Q3 2022

Shaft Main Sink

Q3 2022

Q3 2024

Mine development 310 level

Q3 2024

Q1 2026

Excavate and Install Crush & Convey

Q4 2024

Q4 2025

Mobilize LHDs to extraction level

Q4 2025

Q1 2026

Start Mine ramp up

Q1 2026

-

Full production

-

Q4 2026

Infrastructure

Shaft Civil Works
Civil works for the underground expansion progressed through detailed design, and construction activities ramped up through Q1 2021 with completion of the construction area terraces, laydown areas, shaft pad preparations, along with commencement of shaft collar box cut construction and blasting within the shaft columns in preparation of civil works. Hoist houses, hoist foundations and shaft collars are now well advanced and on time for commencement of pre-sinking which is planned during Q3 2021. To date, over 430 days have been worked LTI-free, on the project. As construction and mining activities ramp up, focused attention will continue to be paid on the continuation of safe operations.

Temporary Power Generation
Temporary power for shaft sinking is required until such time as the upgrade bulk power supply infrastructure is commissioned in Q4 2022. A three phased ramp up of the generator capacity is planned to support the increasing power requirements related to the shaft sinking activities. A power supply and services contract for the temporary generators has been signed with Aggreko International Projects Limited. Mobilization has been initiated with the generator pad established. Commissioning of Phase 1 is scheduled during Q3 2021 to support the start of pre-sink activities.

Bulk Power Supply
During 2020, Lucara negotiated and signed a self-build agreement with the Botswana Power Corporation ("BPC") for the construction of two substations and a 29km long 132kv Transmission line from BPC's newly established Letlhakane substation to the Karowe mine. The planned route follows an existing regional 400kV line and then runs parallel to the existing 11kV transmission line currently supplying bulk power to the Karowe mine. The new power infrastructure will provide the required power for the current open pit, processing plant and the underground mine expansion. Commissioning of and handover to BPC is scheduled for Q4 2022. Construction of substations is scheduled to commence in Q3 2021 and power line construction in Q1 2022.

Camp Construction
A 200-person camp is required to support shaft sinking and underground mine development. The camp is contiguous with and within the Karowe Mine lease. Camp construction has been separated into two 100-person phases, construction of Phase 1 is complete with commissioning and occupation in July 2021 . Phase 2 of the camp will commence construction during Q3 2021, in line with the project schedule.

Procurement

Procurement of long lead items required for shaft sinking and for the bulk power supply are advancing on schedule. Main sinking shaft hoist refurbishment is well underway with packing and shipping commenced for various components. In the process of completion for the hoists are electrical components and the production shaft kibble hoist's gearbox currently in fabrication. All hoist components are estimated for completion in Q4 2021.

Shafts and Mining

Access to the underground mine is via two vertical shafts, the production and ventilation shafts. The shafts will be concrete lined with the production shaft acting as the main air intake and the ventilation shaft as the exhaust. Detailed design and engineering work on the production and ventilation shafts is now 90% complete, and has resulted in the following changes to the 2019 FS: i) production shaft diameter has increased from 8.0 metres to 8.5 metres, ii) ventilation shaft permanent headframe, hoists and internal conveyances have been removed, iii) parallel pre-sinking of both shafts, iv) ventilation fans and coolers to be located on surface, v) in shaft grouting of water strikes changed from grout curtain installation from surface, vi) planned development of an additional sublevel to assist in drilling of drawbells, vii) removal of 670L de-watering galleries.

The number of shaft stations and nominal elevations remains the same as the 2019 FS. The planned depth of the production shaft remains at approximately 767 metres (245masl), but final planned depth of the ventilation shaft has increased marginally to 733 metres (285masl) from 716 metres.

Increased schedule time related to shaft sinking has been a result of the following design changes: i) increased production shaft diameter, ii) time allowances for in shaft grouting during sinking operations planned at known water strike horizons, iii) holing through all shaft stations between shafts, iv) additional ground support for underground stations/level breakouts.

Pre-sink construction contract and shaft sinking equipment procurement were awarded to UMS Botswana and UMS South Africa respectively ("UMS"). METS International Limited, a subsidiary of UMS, was awarded the shaft engineering contract.  UMS is in the process of mobilizing crews to Karowe to initiate pre-sink works. Pre-sinking of the two shafts will run in parallel and start with mobile cranes and then transition to Scott Derrick cranes with the final depth of pre-sink at approximately 40 metres below surface (971 masl).

With the exception of an additional sublevel (340L) to assist with drill and blast of drawbells, the design, layout and infrastructure of the underground mine all remain aligned with the 2019 FS. Detailed engineering and design of the underground infrastructure and layouts will commence in Q3 2021 and are expected to be competed in Q3 2022, with no major changes from the 2019 FS plan anticipated. Underground mine development is scheduled to commence in H2 2024 with underground production ramp up starting in 2026. Full production is scheduled for the end of 2026.

Permitting

In January 2021 , Lucara announced that its application for the renewal of Mining License No 2008/6L in respect of the Karowe Mine had been approved by Botswana's Minister of Mineral Resources, Green Technology and Energy Security ( link to news release ). The renewal was effective January 4, 2021 for a period of 25 years, securing Lucara's mining rights to 2046. In Q2 2020, Lucara received approval of its Environmental Impact Statement and Environmental Management Plan for the Underground project and remaining open pit life of mine. Way Leave approval for construction of the transmission line has also been received.

Tailings Management

Design work has been initiated for expansion to the Fine Residue dump that will align with industry best practices including both the Mining Association of Canada's Toward Sustainable Mining (TSM) initiative and the Global Industry Standard on Tailings Management (GISTM) introduced in August 2020 . Additionally, Lucara has completed the Church of England Pension Fund Tailings Safety Disclosure Response which has been posted to the Lucara website ( see link ).

Environment, Social, Governance

In addition to meeting applicable Botswana laws, regulations and requirements, Lucara has adopted the IFC Performance Standards and the World Bank Group's Environmental, Health and Safety Guidelines for Mining (2007). The development of the UGP adheres to the Equator Principles. Lucara will continue to publish performance results externally through the independently assured annual sustainability report, which is prepared in accordance with GRI Standards ( link to 2020 Sustainability Report ). Lucara is committed to upholding high standards while striving to deliver long-term economic benefits to Botswana and the communities in which we operate.

Mineral Resource and Reserve Estimates

The 2019 Mineral Resource update for the Karowe Mine incorporated historical drilling and sampling data obtained prior to 2018, and additional drilling and sampling information obtained in 2018 and 2019 which targeted the delineation of the deep extension of the South Lobe (deeper than approximately 600m from surface). The 2019 update also included geological information and production data derived from open pit mining to the end of June 2019 . Historic and current geological data was used to develop an updated internal geology model for the South Lobe and updates to the external contacts for the South, Centre and North Lobes.

The internal geology of the South Lobe is comprised of two dominant domains, identified as the M/PK(S) and EM/PK(S) domains. A single diamond size frequency distribution ("SFD") and diamond value model was used prior to 2019 to evaluate the South Lobe. Incremental open pit production of EM/PK(S) material was initiated in early 2018 and sufficient data has since been amassed so that distinct SFD and diamond value distribution models are now defined for both the M/PK(S) and EM/PK(S) domains in the 2019 Mineral Resource update.

The 2021 Mineral Resource update, effective December 25, 2020 ( Annual Information Form ), incorporates production since the 2019 Mineral Resource was completed. The 2021 Mineral Resources for the Karowe Mine have been classified as either Indicated or Inferred Mineral Resources, according to CIM Guidelines. Mineral Resources reported are inclusive of those portions of the Mineral Resources that have been converted to Mineral Reserves.

Mineral Resources

Karowe Mine2021 Mineral Resource Statement (effective date of December 25, 2020)

Classification

Resource

Tonnes (Mt)

Carats (Mcts)

Grade (cpht)

Indicated

South – M/PK(S)

25.51

2.74

10.7

South – EM/PK(S)

20.84

4.43

21.2

Centre

2.78

0.42

15.2

North

0.82

0.09

10.6

Total Indicated

49.96

7.67

15.4

Inferred

South – M/PK(S)

0.31

0.03

10.5

South – EM/PK(S)

4.18

0.87

20.9

South – KIMB3

0.94

0.10

10.9

Total Inferred

5.43

1.01

18.6


Notes:

1.

Prepared by Cliff Revering, P. Eng. of SRK Consulting

2.

Mining Resources are not Mineral Reserves and do not have demonstrated economic viability. All numbers have been rounded to reflect accuracy of estimate. Base of Indicated is 250masl, base of Inferred is 66masl.

3.

Mineral Resources are in-situ Mineral Resources and are inclusive of in-situ Mineral Reserves.

4.

Mineral Resources are exclusive of all mine stockpile material.

5.

Mineral Resources are quoted above a +1.25 mm bottom cut-off and have been factored to account for diamond losses within the smaller sieve classes expected within the current configuration of the Karowe Mine process plant.

6.

Inferred Mineral Resources are estimated on the basis of limited geological evidence and sampling, sufficient to imply but not verify geological grade and continuity. They have a lower level of confidence than that applied to an Indicated Mineral Resource and cannot be directly converted into a Mineral Reserve.

7.

Average diamond value estimates are based on 2019 diamond sales data provided by the Company.

8.

Mineral Resources have been estimated with no allowance for mining dilution and mining recovery.

A mine plan was developed to extract the economic portions of Indicated Mineral Resources of the Underground Project (2019 FS). The South Lobe is planned to be mined through a combination of open pit and underground mining methods. The North and Centre Lobes are planned for extraction by open pit mining methods only. All Mineral Reserves in the table that follows are classified as Probable Mineral Reserves. The Qualified Person preparing the Mineral Reserve Estimate, Gord Doerksen, P. Eng., did not identify any extraordinary risk, including legal, political or environmental that would materially affect potential Mineral Reserves development.

Mineral Reserves

Karowe Mine 2021 Mineral Reserve Estimate (effective date of December 25, 2020)

Lobe

Reserve Category

Ore (Mt)

Carats
('000s ct)

Grade
(cpht)

Open Pit

North

Probable

0.4

38

9.5

Centre

Probable

2.7

403

15.2

South – EM/PK(S)

Probable

2.3

574

25.0

South – M/PK(S)

Probable

7.8

828

10.5

Open Pit

Total

13.2

1,843

13.9

Underground

South – EM/PK(S)

Probable

16.3

3,246

19.9

South – M/PK(S)

Probable

17.1

1,807

10.6

Underground

Total

33.4

5,053

15.1

Stockpiles

Life of Mine

Probable

3.8

161

4.3

Mixed

Probable

3.5

381

10.8

Stockpile

Total

7.3

542

7.4

Combined

All

Total

53.9

7,438

13.8


Notes:

1.

Prepared by Gord Doerksen, P. Eng., JDS Energy & Mining Inc.

2.

CIM Guidelines were followed for Mineral Reserves.

3.

Mineral Reserves are estimated based on an UG mining cost of $9/t, a processing cost of $16/t and a G&A cost of $6/t. Process recovery of the diamonds was assumed to be 100% as the recoveries were included in the mineral resource block model assumptions and therefore have taken recoveries into account. All of the kimberlite material in the South Lobe is above the cut-off value. Base of Probable Reserve is 310 masl.

4.

Mineral Reserves are quoted above a +1.25 mm bottom cut-off and have been factored to account for diamond losses within the smaller sieve classes expected within the current configuration of the Karowe Mine process plant.

5.

Diamond valuation was derived from historical sales adjusted for current and estimated future values.

6.

Tonnages are rounded to the nearest 100,000 tonnes; diamond grades are rounded to one decimal place. Tonnage and grade measurements are in metric units; contained diamonds are reported as thousands of carats.

7.

All numbers have been rounded to reflect accuracy of estimate.

COVID-19 Measures

The Karowe mine has established standard operating protocols for COVID-19 that all employees and workers must adhere to, including: proof of negative test results for new contractors, temperature screening, sanitizing stations throughout the operation, and the use of isolation pods in the event of a suspected case. The contractor camp for the underground expansion has implemented COVID-19 protocols including availing a section of the camp for COVID-19 positive residents who need to self-isolate.

Next Steps

Next steps on the Karowe Underground development will include the following: UMS mobilization to site and start of pre-sink in Q3 2021, completion of early civil works in Q4 2021, continuation of detailed design and engineering of the underground mine infrastructure and layout, commencement of bulk power supply infrastructure with substation construction scheduled to start in Q3 2021, and transmission line engineering in H2 2021. The start of engineering on the tailings expansion and completion of other site related infrastructure will also take place in 2021. JDS Energy & Mining Inc. is the Engineering Procurement Construction Manager for the execution of the Karowe UGP and is currently building up the onsite project team in conjunction with Lucara's Owners team and working in close cooperation with the Karowe Diamond Mine operations team.

CONFERENCE CALL
The Company will host a conference call and webcast to discuss the underground expansion on Wednesday, August 11, 2021 at 7:00 a.m. Pacific, 10:00 a.m. Eastern, 3:00 p.m. UK, 4:00 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:
03343101 / Lucara Diamond

Dial-In Numbers:

Toll-Free Participant Dial-In North America

(+1) 888 390 0546

UK Toll free

0 800 652 2435

All Other 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=1483811&tp_key=0dc7900db8

The presentation slideshow will also be available in PDF format for download from the Lucara website ( Link to presentation ).

Conference Replay:
A replay of the telephone conference will be available two hours after the completion of the call until August 18, 2021 .

Replay number (Toll Free North America)

(+1) 888 390 0541

Replay number (International)

(+1) 416 764 8677

The pass code for the replay is: 343101 #.

This press release has been reviewed and approved by Dr. John Armstrong , Ph.D. P.Geol., Vice-President, Technical Services of the Company and a "Qualified Person" for the purposes of National Instrument 43-101 and Mr. Gord Doerksen P.Eng of JDS Energy and Mining Inc. an Independent Qualified Person under National Instrument NI 43-101.

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.

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 persons set out, at 5:05 pm Pacific Time on August 10, 2021 .

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain of the statements made herein contain certain "forward-looking information" and "forward-looking statements" as defined in applicable securities laws. Generally, any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance and often (but not always) using forward-looking terminology such as "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "budgets", "scheduled", "forecasts", "assumes", "intends", "strategy", "goals", "objectives", "potential", "possible" or variations thereof or stating that certain actions, events, conditions or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

In particular, forward-looking information and forward-looking statements include, but are not limited to, information or statements with respect to the length by which the UGP will extend the life of mine, forecasted revenues, diamond prices, the UGP being fully financed from a combination of debt, equity and projected cash flows from open pit operations, that expected cash flow from operations, combined with external financing will be sufficient to complete construction of the UGP, the anticipated total capital expenditures and schedule to develop and complete the UGP, the timing of key construction milestones including shaft sinking activities,  the timing of achieving production targets, the Company's adoption of and compliance with internationally recognized standards including IFC Performance Standards and the Equator Principles, the timing for the UGP to pay back capital, that the timing of the end of the open pit mine life will limit the risk of a production shortfall during the UGP ramp-up, statements on how COVID-19 or variants thereof have or may impact the schedule for the UGP or the Company's ability to continue to mine the open pit during the construction period, that the decisions taken to de-risk the UGP will be successful, that the people, equipment and materials required to build the UGP will be available when required to maintain the proposed UGP schedule, that the use of LHS to mine the underground will provide additional mine life from the Karowe ore body and that the use of this mining method will allow access to the EM/PK(S) ore as planned, that minimal dilution will result from the use of LHS and that the underground development can occur simultaneously with open pit operations.

Forward-looking information and forward-looking statements may also include, but are not limited to: the economic potential of a mineralized area, the size and tonnage of a mineralized area, anticipated sample grades or bulk sample diamond content, future production activity, the future price and demand for diamonds, future forecasts of revenue, estimation of mineral resources, development plans, cost and timing of the development of deposits and estimated future production, permitting time lines, or that all required permits have been obtained which are required to develop the UGP in accordance with the current plan, currency exchange rates, success of exploration, requirements for and availability of additional capital, capital expenditures, operating costs, timing of completion of technical reports and studies, tax rates, timing of drill programs, government regulation of operations, environmental risks and ability to comply with all environmental regulations, reclamation expenses, title matters including disputes or claims, limitations on insurance coverage, negotiations and agreements among the Company and the Botswana Mine Workers Union, the completion of transactions and timing and possible outcome of pending litigation.

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 https://www.sedar.com , as well as impacts from COVID-19 or variants thereof on the Company's ability to continue to operate as planned, including the availability of people, equipment and materials required to maintain the proposed UGP schedule, the Company's ability to access the markets and generate revenues at anticipated diamond prices, the Company's ability to continue to comply with the terms of its debt financing, 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.

Lucara Announces Karowe Underground Expansion Project Update (CNW Group/Lucara Diamond Corp.)

SOURCE Lucara Diamond Corp.

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TSX: DIAM

Star Diamond Corporation ("Star Diamond" or the "Company") reports that the audited financial results for the year ended December 31, 2023 will be filed today on SEDAR+ and may be viewed at www.sedarplus.ca once posted.

Star Diamond Logo (CNW Group/Star Diamond Corporation)

Overview
Star Diamond Corporation is a Canadian natural resource company focused on exploring and developing Saskatchewan's diamond resources. Star Diamond currently holds, through a joint venture arrangement with Rio Tinto Exploration Canada Inc. ("RTEC"), a wholly-owned subsidiary of Rio Tinto plc, a 25% interest in certain mineral properties (which include the Star – Orion South Diamond Project, or the "Project") within the Fort à la Corne diamond district of central Saskatchewan, Canada . These properties are in close proximity to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development.

The Company also holds a 50% interest in the exploration and evaluation properties and assets of the Buffalo Hills JV located in north-central Alberta, Canada . Canterra Minerals Corporation ("Canterra") holds the remaining 50% interest. Canterra is the operator of the Buffalo Hills JV.

Fort à la Corne mineral properties
On November 28, 2023 , the Company entered into a binding agreement (the "Agreement") with RTEC, providing for the transfer by RTEC to Star Diamond all of RTEC's 75% interest in the Project.

The Agreement provides that, upon closing:

  • RTEC will transfer to Star Diamond all of RTEC's 75% interest in the Project, such that the Project will be 100% owned by Star Diamond ;
  • RTEC will transfer to Star Diamond ownership of the trench cutter drill rig used by RTEC to complete its prior bulk sampling program at the Project;
  • RTEC will transfer to Star Diamond the Bulk Sample Plant located at the Project, including the TOMRA XRT diamond sorting machine that is on-site;
  • Star Diamond will issue to RTEC and/or an affiliate that number of common shares of Star Diamond that results in RTEC and its affiliates owning 19.9% of the then outstanding common shares of Star Diamond (RTEC and its affiliates currently own approximately 2.3% of Star Diamond's outstanding common shares); and
  • RTEC and Star Diamond will enter into an Investor Rights Agreement whereby, among other things, RTEC will be granted certain pre-emptive rights to maintain its 19.9% ownership interest in Star Diamond in connection with future financings undertaken by Star Diamond , and RTEC will agree to certain standstill protections provided that RTEC will have the right to increase its 19.9% ownership position in the event that Star Diamond receives an acquisition proposal.

Upon completion of the transactions that are the subject of the Agreement, Star Diamond will have full control and responsibility for the Project, the existing joint venture agreement between RTEC and Star Diamond will terminate, and Star Diamond will release and indemnify RTEC for liabilities arising from or relating to the Project, all in exchange for a $4 million payment from RTEC to Star Diamond . RTEC has agreed that it will provide on Star Diamond's behalf, for up to five years following closing, letters of credit in the aggregate amount of no more than $9.9 million to secure certain environmental remediation and reclamation obligations related to the Project. Star Diamond will be obliged to repay any amounts drawn on these letters of credit and such repayment obligations will be secured against the Project and its assets.

As of the date of this News Release, the Agreement is expected to close in the near future.

Recent activities relating to the Star - Orion South Diamond Project and Fort à la Corne mineral properties
During the first quarter of 2024, Star Diamond continued to work with RTEC and Saskatchewan Ministry of Environment representatives to ensure an orderly close to the Agreement between Star Diamond and RTEC.

Year End Results
For the year ended December 31, 2023 , the Company recorded a net loss of $2.8 million or $0.01 per share (basic and fully diluted) compared to a net loss of $68.8 million or $0.15 per share in 2022. The decrease in net loss year over year was due primarily to the prior year's impairment charge of $66.3 million combined with the mark-to-market loss on the Wescan investment offset by the elimination of the $0.9 million contingent consideration.

At December 31, 2023 , the Company had $0.6 million (2022 – $2.6 million ) in cash and cash equivalents and a working capital deficit of $(0.3) million (2022 - $2.0 million ). The decrease in working capital was a result of administrative and exploration and evaluation expenditures offset by proceeds received from the December 2023 private placement. Subsequent to December 31, 2023 , the Company closed the second and final tranche of a non-brokered private placement. However, the ability of the Company to continue as a going concern and fund its expenses in an orderly manner will require additional forms of financings.

Selected financial highlights include:

Condensed Consolidated Statements of Financial Position

As at

December 31,

2023

As at

December 31,

2022

Current assets

$    0.6 M

$    2.7 M

Exploration and evaluation, investments and other assets

0.6 M

0.4 M

Current liabilities

0.9 M

0.7 M

Non-current liabilities

0.1 M

0.0 M

Shareholders' equity

0.2 M

2.4 M




Consolidated Statements of Loss

Year Ended
December 31,

2023

Year Ended
December 31,

2022

Expenses

$ 3.0 M

$ 3.0 M

Loss before undernoted items

(3.0)M

(3.0)M

Investment in Wescan Goldfields Inc.

(0.0)M

(0.4)M

Contingent consideration

0.0 M

0.9 M

Impairment charge

0.0 M

(66.3)M

Net loss for the year

(3.0)M

(68.8)M

Net loss per share for the year (basic and diluted)

(0.01)

(0.15)




Condensed Consolidated Statements of Cash Flows

Year Ended
December 31,

2023

Year Ended
December 31,

2022

Cash flows used in operating activities

$  (2.3)M

$  (4.9)M

Cash flows from investing activities

0.0 M

0.6 M

Cash flows from financing activities

0.2 M

5.7 M

Net increase (decrease) in cash

(2.1)M

1.3 M

Cash – beginning of year

2.6 M

1.3 M

Cash – end of year

0.6 M

2.6 M

Outlook
Fort à la Corne mineral properties
Subsequent to the successful close of the Agreement with RTEC, Star Diamond's technical team will focus on the technical investigation and evaluation of the Star – Orion South Diamond Project, with the goal of a future development decision. The initial work aims to prepare a revised Mineral Resource estimate for the Star – Orion South Diamond Project, which will form the foundation of an updated Prefeasibility study(" PFS"). The PFS will enable a Feasibility Study, on which a production decision can be based.

Buffalo Hills mineral properties
Management continues to review the recent results from the diamond valuation and typing analysis. A more detailed update on activities at the Buffalo Hills JV will be provided as it becomes available.

About Star Diamond Corporation
Star Diamond Corporation is a Canadian based corporation engaged in the acquisition, exploration and development of mineral properties. Shares of Star Diamond trade on the Toronto Stock Exchange under the trading symbol "DIAM". Star Diamond currently holds, through a joint venture arrangement with RTEC, a 25% interest in the Project. The Project is located in central Saskatchewan , in close proximity to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development. The Company also holds a 50% interest in the exploration and evaluation properties and assets of the Buffalo Hills JV located in north-central Alberta, Canada . Canterra holds the remaining 50% interest and is the operator of the Buffalo Hills JV.

Technical Information
All technical information in this press release has been prepared under the supervision of George Read , Senior Vice President Corporate Development, Professional Geoscientist in the Provinces of Saskatchewan and British Columbia and Mark Shimell , Vice President Exploration, Professional Geoscientist in the Provinces of Saskatchewan and Alberta , who are the Company's "Qualified Persons" under the definition of NI 43-101.

Stay Connected with Us:
Twitter: https://twitter.com/StarDiamondCorp
LinkedIn: https://www.linkedin.com/company/star-diamond-corp
Facebook: https://www.facebook.com/people/Star-Diamond-Corp/100058096376664/
Instagram: https://www.instagram.com/stardiamondcorp/

Caution Regarding Forward-looking Statements

This press release contains "forward-looking statements" and/or "forward-looking information" (collectively, "forward-looking statements") within the meaning of applicable securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate" or "believes", or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results, "may", "could", "would", "will", "might" or "will be taken", "occur" or "be achieved" or the negative connotation thereof. All statements, other than statements of historical fact, are forward-looking statements.

These forward-looking statements are based on Star Diamond's current beliefs as well as assumptions made by and information currently available to Star Diamond and involve inherent risks and uncertainties, both general and specific. Risks exist that forward-looking statements will not be achieved due to a number of factors including, but not limited to, statements regarding Rio Tinto Canada, the Company's ability to obtain financing to further the exploration, evaluation and/or development of exploration and evaluation properties in which the Company holds interest, the economic feasibility of any future development projects, developments in world diamond markets, changes in diamond prices, risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar, the impact of changes in the laws and regulations regulating mining exploration, development, closure, judicial or regulatory judgments and legal proceedings, operational and infrastructure risks and the additional risks described in Star Diamond's most recently filed Annual Information Form, and annual and interim MDA.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. In addition, forward-looking statements are provided solely for the purpose of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our operating environment. Accordingly, readers should not place undue reliance on forward-looking statements.

Forward-looking statements in this news release are made as of the date hereof and Star Diamond assumes no obligation to update any forward-looking statements, except as required by applicable laws.

SOURCE Star Diamond Corporation

Cision View original content to download multimedia: http://www.newswire.ca/en/releases/archive/March2024/25/c1142.html

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STAR DIAMOND APPOINTS EWAN MASON AS ITS PRESIDENT AND CEO

Star Diamond Corp (TSX: DIAM) ("Star Diamond" or the "Company") is pleased to announce that its Board of Directors has appointed Ewan Mason to the position of President and Chief Executive Officer, effective immediately. Mr. Mason has served as Interim President and Chief Executive Officer since January 1, 2023. Mr. Mason will continue to serve as Chair of the Company's Board.

add logo (CNW Group/Star Diamond Corporation)

"We are pleased to name Ewan Mason as the President and CEO of Star Diamond," said Lisa Riley , Lead director of the Board. "Since he was appointed interim CEO in January 2023, Ewan's leadership has been integral in the successful negotiation process and the coming acquisition of Rio Tinto Exploration Canada Inc.'s 75% interest in the Fort à la Corne ("FALC") diamond district. He also continues to build strong relationships with our employees, shareholders and stakeholders, all while maintaining a focus on shareholder value."

"I am honored to accept the CEO position at Star Diamond," said Ewan Mason, President and CEO of Star Diamond. "I am excited about the prospect of an ongoing collaboration with an exceptional team and the future development of the world class diamond project that is FALC".

About Star Diamond Corporation
Star Diamond is a Canadian-based corporation engaged in the acquisition, exploration and development of mineral properties. Shares of Star Diamond trade on the Toronto Stock Exchange under the trading symbol "DIAM". Star Diamond's most significant asset is its interest in the Fort à la Corne property in central Saskatchewan. These kimberlites are located in close proximity to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development.

Stay Connected with Us:
Twitter: https://twitter.com/StarDiamondCorp
LinkedIn: https://www.linkedin.com/company/star-diamond-corp
Facebook: https://www.facebook.com/people/Star-Diamond-Corp/100058096376664/
Instagram: https://www.instagram.com/stardiamondcorp/

Caution Regarding Forward-looking Statements

This press release contains "forward-looking statements" and/or "forward-looking information" (collectively, "forward-looking statements") within the meaning of applicable securities legislation. All statements, other than statements of historical fact, are forward-looking statements. The use of any of the words "anticipate", "plan", "aim", "target", "contemplate", "continue", "estimate", "expect", "intend", "propose", "might", "may", "will", "shall", "project", "should", "could", "would", "believe", "predict", "forecast", "pursue", "potential", "possible", "capable" and similar expressions are intended to identify "forward-looking statements. Forward-looking statements in this press release include, but are not limited to, expectations regarding the timing for transfer of the Permit to Operate and completion of the transactions that are the subject of the Agreement.

These forward-looking statements are based on Star Diamond's current beliefs as well as assumptions made by and information currently available to it and involve inherent risks and uncertainties, both general and specific. Risks exist that forward-looking statements will not be achieved due to a number of factors including, but not limited to, the MoE's approval processes and the impact of changes in the laws and regulations regulating mining exploration, development, closure, judicial or regulatory judgments and legal proceedings and the additional risks described in Star Diamond's most recently filed Annual Information Form, annual and interim MD&A.

Although management of Star Diamond considers the assumptions contained in forward-looking statements to be reasonable based on information currently available to Star Diamond, those assumptions may prove to be incorrect. When making decisions with respect to Star Diamond, investors and others should not place undue reliance on these statements and should carefully consider the foregoing factors and other uncertainties and potential events.

Star Diamond does not undertake any obligation to release publicly revisions to any forward-looking statement to reflect events or circumstances after the date of this release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued forward-looking statement constitutes a reaffirmation of that statement. Continued reliance on forward-looking statements is at investors' own risk.

SOURCE Star Diamond Corporation

Cision View original content to download multimedia: http://www.newswire.ca/en/releases/archive/March2024/01/c3453.html

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TSX: DIAM

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