Lucara Announces Strong Q4 2020 Sales and Operational Results

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

Lucara Diamond Corp. (“Lucara” or the “Company”) today reports its results for the year and quarter ended December 31, 2020 . View PDF version .

HIGHLIGHTS:

Revenue of $42.4 million or $402 per carat sold in Q4 2020. This includes diamonds sold through a combination of regular tenders, Clara, and through HB Antwerp (“HB”) under the supply agreement announced in July 2020 .
FY2020 total operating cash costs of $27.80 per tonne processed ⁽¹⁾ , 13% lower than the prior year.
Adjusted EBITDA ⁽¹⁾ in Q4 2020 of $10.2 million marks a continued strong operating margin of 49%.
Lucara continues to have a strong availability of working capital, including $4.9 million in cash at the end of Q4 and $19.5 million available from a revolving term credit facility. No long-term debt.
Specials recovered (+10.8 carats) equated to 6.7% weight percentage of total recovered carats, the fourth year to achieve greater than 6%.
Extension of the Karowe mining license for a period of 25 years to 2046, marking a critical step in the advancement of the Karowe underground expansion project.
In January 2021 , the Company announced the recoveries of two, top white gem quality diamonds (341 carats and 378 carats) from ore sourced from the M/PK(s) unit within the South Lobe. Both stones were recovered unbroken.

(1) See Non-IFRS measures

Eira Thomas, President & CEO commented: “The measures that Lucara took early in the pandemic, including the decision not to sell rough diamonds in excess of +10.8 carats after Q1, helped protect and support prices for large, high value diamonds that account for more than 70% of our revenues. These efforts in conjunction with our transformational supply agreement with HB Antwerp executed in July, resulted in strong price recoveries by Q4, a trend which has continued into 2021. The recent recovery of two, high value +300 carat stones continue to highlight the extraordinary nature of the Karowe resource and underpin the rationale for underground expansion, extending our mine life out to at least 2040. In late 2020, the Government of Botswana also granted Lucara a mining license extension for 25 years, a critical milestone for the underground project, paving the way for the completion of a supplementary debt financing in support of full project sanction, anticipated in the second half of 2021.”

REVIEW FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2020

Mining and processing operations continued without interruption at the Karowe Mine, where more than 98% of the workforce are Botswana Nationals.
Operational highlights for the year ended December 31, 2020 were as follows:

Continuous operations with implementation of new health and safety protocols to protect the health and well-being of employees, contractors and local communities.
Ore and waste mined of 3.0 million tonnes and 2.7 million tonnes, respectively.
2.7 million tonnes of ore processed resulting in 381,706 carats recovered, achieving a recovered grade of 14.3 carats per hundred tonnes.
Successful completion of planned XRT upgrades, a key component of the diamond recovery circuit.

A record setting year for the recovery of Specials (single diamonds in excess of 10.8 carats):

a 549 carat top-white gem diamond “Sethunya” ( February 2020 )
a 998 carat, high white clivage diamond ( November 2020 )
throughout the year, a total of 34 stones in excess of 100 carats, of which 10 stones exceeded 200 carats.

Two unique collaboration agreements entered into with Louis Vuitton and HB Antwerp to create a high jewellery collection from the historic 1,758 carat “Sewelô”, the largest diamond ever mined in Botswana , and the 549 carat “Sethunya”.
Clara’s customer base increased from 25 to 75 customers (+178% in 2020), with continuous bi-weekly sales on Clara throughout 2020 providing regular cash flow and visibility into price trends.
An investment of $18.7 million on the Karowe underground expansion project under a re-scoped budget focused on de-risking the project schedule (procurement of long lead equipment, detailed design and engineering).
Financial highlights for the year ended December 31, 2020 included:

Total revenues of $125.3 million (2019: $192.5 million ) or $335 per carat (2019: $468 per carat). Revenue, from this agreement, will continue to be recognised in 2021 as rough…