TIDM0QUI
RNS Number : 9026H
Lucara Diamond Corp
29 November 2022
November 28, 2022
NEWS RELEASE
LUCARA ANNOUNCES OPERATING GUIDANCE FOR 2023
VANCOUVER, November 28, 2022 /CNW/ (LUC - TSX, LUC - BSE, LUC -
Nasdaq Stockholm)
Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to
provide operating guidance for 2023 (all amounts in USD unless
otherwise stated).
2023 OUTLOOK
This section provides management's production and cost estimates
for 2023. 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 2023
------------------------------------------------- ---------------------
Diamond revenue $200 million to $230
million
------------------------------------------------- ---------------------
Diamond sales 385,000 carats to
415,000 carats
------------------------------------------------- ---------------------
Diamonds recovered 395,000 carats to
425,000 carats
------------------------------------------------- ---------------------
Tonnes mined - Ore 1.9 million to 2.3
million
------------------------------------------------- ---------------------
Tonnes mined - Waste 2.2 million to 2.8
million
------------------------------------------------- ---------------------
Tonnes processed - Ore 2.6 million to 2.9
million
------------------------------------------------- ---------------------
Total operating cash costs per tonne processed $32.50 to $35.50
(including (a) to (b) below):
------------------------------------------------- ---------------------
(a) Cash cost per tonne mined (ore and waste) $7.00 to $8.00
------------------------------------------------- ---------------------
(b) Cash cost per tonne processed $12.00 to $13.00
------------------------------------------------- ---------------------
Botswana G&A expenses, including sales and $3.50 to $4.50
marketing, per tonne processed
------------------------------------------------- ---------------------
Tax rate 0%
------------------------------------------------- ---------------------
Average exchange rate - Botswana Pula per
United States Dollar 12.0
------------------------------------------------- ---------------------
REVENUE AND SALES CHANNELS
In 2023, the Company's revenue forecast assumes that 52% of the
carats recovered will come from the higher value M/PK(S) and
EM/PK(S) units within the South Lobe and the remaining 48% of the
carats recovered will come from the Centre Lobe in accordance with
the mine plan, generating revenue between $200 and $230 million in
2022. Centre Lobe material, while higher grade, has a lower weight
percentage of stones greater than 10.8 carats in size when compared
to South Lobe material.
With the recently announced extension of the HB agreement, 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
In 2023, the Company expects to mine between 4.1 and 5.1 million
tonnes, of which ore tonnes mined represent approximately half 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. Material from the open pit is
planned to be processed between 2023 to 2026 when the mine
transitions to underground. Ore from the underground development is
expected to supplement lower grade stockpile material during the
transition to underground at the end of the open pit mine life.
UNDERGROUND AND SUSTAINING CAPITAL EXPITURES
In 2023, capital costs for the underground expansion are
expected to be up to $105 million and will focus predominantly on
shaft sinking activities, along with construction of the bulk air
cooler, tendering the underground development contract and
underground equipment purchases. Ramp-up to planned sinking rates
for both the ventilation and production shaft continues. A complete
review of the current program schedule and budget is underway and
will be completed in Q1 2023.
Sustaining capital and project expenditures related to the open
pit mining operations are expected to be up to $20 million with a
focus on replacement and refurbishment of key asset components in
addition to dewatering activities, an expansion of the tailings
storage facility in accordance with Global Industry Standard on
Tailings Management and completion of a community sports
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 2023
revenue guidance of $200 million to $230 million and assuming the
underground development expenditures of $105 million, the tax rate
is expected to be 0% for 2023.
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. Platform trials and
discussions with third party suppliers of rough diamonds are
ongoing to build supply, which remains a key objective for 2023 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:
Canada Hannah Reynish, 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 Diamond Mine
in Botswana. The Karowe Mine has been in production since 2012 and
is the focus of the Company's operations and development
activities. Clara Diamond Solutions Limited Partnership ("Clara"),
a wholly-owned subsidiary of Lucara, has developed 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. Lucara has an
experienced board and management team with extensive diamond
development and operations expertise. Lucara and its subsidiaries
operate transparently and in accordance with international best
practices in the areas of sustainability, health and safety,
environment, and community relations. Lucara has adopted the IFC
Performance Standards and the World Bank Group's Environmental,
Health and Safety Guidelines for Mining (2007). Accordingly, the
development of the Karowe underground expansion project ("UGP")
adheres to the Equator Principles. Lucara is committed to upholding
high standards while striving to deliver long-term economic
benefits to Botswana and the communities in which the Company
operates.
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 28, 2022 at 2:00pm 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, forward-looking information and forward-looking
statements in this news release may include, but are not limited
to, 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; development
expenditures and reclamation costs; expectation of diamond prices;
the benefits to the Company of diamond supply agreements with HB
and the ability to generate better prices from the sale of the
Company's +10.8 carat production as a polished stone and to provide
more regular cash flow than in previous periods; estimates of
top-ups pursuant to the HB supply agreement; assumptions related to
foreign currency exchange rates and tax rates; assumptions and
expectations related to the ongoing development of an underground
mining operation at Karowe including associated capital costs and
timing; information or statements with respect to the equity and
project debt financings, the intended use of proceeds, the
Company's ability to comply with the terms of the Facilities which
are required to construct the Karowe UGP, that expected cash flow
from operations, combined with external financing will be
sufficient to complete construction of the Karowe UGP, that the
estimated timelines to achieve mine ramp up and full production
from the Karowe UGP can be achieved; 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
scaling of the digital platform for the sale of rough diamonds
owned by Clara; 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,
changes in inflation, the supply and demand for, deliveries of and
the level and volatility of prices of rough diamonds, costs of
power and diesel, impacts of potential disruptions to supply
chains, 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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