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Lucara Diamond Provides Operational Update and Announces COVID-19 Response Strategy

Mining News - Published on Wed, 01 Apr 2020

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Lucara Diamond Corp announced that it has implemented a crisis management strategy in relation to COVID-19, to protect the health and well-being of its employees in Botswana and Canada. Lucara's 100% owned Karowe Diamond Mine, situated in north central Botswana remains fully operational, under new measures and guidelines implemented by the Government of Botswana earlier this week. These measures include increased travel restrictions, reduced staffing and increased social distancing pertaining to all aspects of its business. Employees who are able to work remotely are doing so. As travel restrictions relating to COVID-19 are expected to remain in place for an unknown period of time, the Company's ability to complete tenders in Botswana may be impacted. As a temporary measure, the Government of Botswana has granted Lucara permission to hold diamond sales in Antwerp, Belgium if required.

Lucara completed its first of four planned diamond tenders for the year on March 5, and achieved sales prices within 1% of forecast, however, diamond prices have since deteriorated in response to weaker demand as COVID-19 has continued to spread globally. Though Lucara's next quarterly tender is not scheduled to take place until mid May 2020, the full impact of COVID-19 on Lucara's operations and production outlook for 2020 remains highly uncertain, and as a result, the Company has taken the decision to suspend its 2020 guidance until further notice.

Key Operational Highlights to Date:

Lucara began the year with a strong balance sheet - cash positive, no debt, and an undrawn US$50mln working capital facility.

Lucara is a low volume, high value diamond producer, with 70% of revenues generated from diamonds in excess of 10.8 carats. Diamond tenders are held quarterly.

Lucara's first quarterly diamond tender was completed March 5 achieving sales results within 1% of forecasted reserve prices; all proceeds from this tender have been received.

Clara, Lucara's web based digital sales platform for rough diamonds, which sells diamonds under 10.8 carats in size remains operational.

Lucara has flexibility and optionality in its capital budget for 2020. Spending on the underground project is scheduled to ramp up in Q3 but Lucara has the ability to adjust the timing of these expenditures as they are not currently committed.

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Posted By : Rabi Wangkhem on Wed, 01 Apr 2020
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