Where Bigger Is Where Bigger Is
Jan 2016 Jan 2016
Where Bigger Is Where Bigger Is Jan 2016 Jan 2016 Cautionary - - PowerPoint PPT Presentation
Where Bigger Is Where Bigger Is Jan 2016 Jan 2016 Cautionary Statement Cautionary Statement Forward looking information This investor presentation contains forward looking statements and information as defined in applicable securities
Jan 2016 Jan 2016
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Forward‐looking information This investor presentation contains forward‐looking statements and information as defined in applicable securities laws including: the estimates of the Company’s mineral reserve and resources; estimates of the Company’s production and sales volumes, revenue for the Karowe Mine; exploration and development plans and objectives, production costs, exploration and development
“potential”, “possible” and similar expressions, or statements that events, conditions or results “will”, “may”, “could” or “should” occur or achieved. Forward‐looking statements are based on the assumptions, 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 and uncertainties 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. In particular, such risks include 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), 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
and uncertainties describe under Risks and Uncertainties disclosed under the heading “Risk Factors’ in the Company’s most recent Annual Information Form available at http://www.sedar.com. Forward‐looking statements and information 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. Readers are cautioned not to place undue reliance on forward‐looking statements and information. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities and no part of it shall form the basis of or be relied upon in connection with any investment decision in relation thereto. Technical information NI 43‐101 Technical Report on the Feasibility Study for the AK6 Kimberlite Project, Botswana Prepared by MSA GeoServices (Pty) Ltd on behalf of Lucara Diamond Corp., dated December 31, 2010. Updated NI43‐101 report released on February 4, 2014, based on update Mineral Resource Estimate released by Lucara Diamond Corp., dated December 19, 2013. The authors of these technical reports are independent of the Company and are qualified persons for the purposes of National Instrument 43‐101 – Standards of Disclosure for Mineral Projects (“NI 43‐101”). The technical reports are available for review on SEDAR at www.sedar.com. All currencies mentioned in this presentation are in United States Dollars (“US$”) unless otherwise mentioned.
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8.0 carat fancy pink diamond
foremost producers of Type IIa diamonds in the world
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Karowe
– Excluding the sale of the two very large exceptional diamonds
relocation)
Exploration
Lucara (Boteti)
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$42 $181 $266 $103 $173 $91 $85 $‐ $50 $100 $150 $200 $250 $300 2012 2013 2014 Millions Revenue (US$) EBITDA (US$) Free Cashflow (US$) 0% 50% 32% Free Cashflow Margin
Financial Summary – 3 Year Performance
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Karowe Mine 100% Owned Production Boteti Exploration Block A & E BK 02, AK 11, 12, 13 and 14
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IntBas(S)
WKBBX(N)
WBBX(S) WK(C) WK(N)
BBX(S)
WK(S)
M/PK(S)
FK(N)
FK(C)
CFK(C)
WKBBX(N)
BBX(N) BBX(C)
“gap” 1000masl 900 800 700 600 520masl
Pit outline – Dec 2015
WKBBX(N)
CKIMB(S) CKIMB(C) CKIMB(N) CBBX(S)
Indicated Resource
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at depth
Kimberlite extent showing location of large gem diamond recoveries
336cts
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more than 815 being recovered during 2014 at an average stone size of 29.1carat/stone
stone size of 31.5 carats
$217 $351 $413 North Centre South $276 $276 $231 $‐ $100 $200 $300 $400 $500 $600 $700 North Centre South North Centre South 2011 Resource Diamond Value Estimate 2013 Resource Diamond Value Estimate
2012 Average Sales Value ‐ $253/ct 2013 Average Sales Value ‐ $411/ct 2014 Average Sales Value ‐ $644/ct 2015 Average to date Sales Value ‐ $560/ct
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were sold for gross proceeds of $158.6 million
2 8 5 20 36 24 15 31 28 26 32 27
0% 20% 40% 60% 80% 100% 2013 2014 2015
Lucara Exceptional Stone Sales
(with values greater than $250,000)
$250,000 $500,000 $1,000,000 $5,000,000
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recovery of two very special diamonds.
have been recovered in more than 100 years weighing 1,111 carats.
colour was also recovered weighing 813 carats
1,111 carat diamond, the second largest gem quality diamond ever recovered 813 carat diamond
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$58.9 $72.8
Q3 2015 Q3 2014
Adjusted Net Income (millions)
$105.5 $137.6
Q3 2015 Q3 2014
Operating Earnings (millions)
$95.3 $125.8
Q3 2015 Q3 2014
EBITDA (millions)
$122.7 $133.1
Q3 2015 Q3 2014
Cash‐on‐hand (millions) ‐23% ‐19% ‐8 % ‐24%
Q3 2015 Q3 2014 Variance % Mining and Process Ore processed (t) 1,671,008 1,854,825 ‐10% Carats recovered (cts) 276,443 316,341 ‐13% Plant feed grade (cpht) 16.5 17.1 ‐4% Waste mined (t) 10,746,948 7,793,033 38% Costs $/t processed $29.4 $26.6 11% $/ct processed $131 $123 7% Revenues EBITDA (million) $95.3 $125.8 ‐24% Sales Revenue (million) $158.6 $195.0 ‐19% $/ct sold $560 $634 ‐12% Cash operating margin $429 $511 ‐16%
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Work Plan
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5,000t sample collection Bulk Sample Plant
AK12 Kimberlite Orapa Tailings
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Background
kimberlites, potential for additional discoveries, northern edge is contiguous with Debswana Orapa Mine Lease. Excellent road access, 15 kilometers north of Karowe Mine
however little advanced work. AK13,14 at discovery‐ phase little to no exploration work
amenable for surface trenching Work Plan
geophysics to re‐establish control
anomalies
for diamond content and size distribution analysis – both AK11 and AK12 are candidates
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Lucara
consistent recovery of large and exceptional Type IIa diamonds
Karowe
Exploration
Address Suite 2000 885 West Georgia St. Vancouver, B.C. Canada V6C 3E8 Phone and Fax
Email and Web lucara@namdo.com www.lucaradiamond.com
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Key Factors Affecting The Diamond Market Long Term Factors
Short Term Factors
Rough
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Bain & Company – The Global Diamond Report 2015
40 35 30 25 20 15 10 5
2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2001 2007 2011 2015E 2019F 2023F 2027F 2030F
Base demand Low demand Base production Stable production
CAGR (2015‐2030)
~3‐4% ~‐2‐‐1% Forecast
Rough‐diamond supply and demand $ billions, 2000 ‐ 2030 (2015 prices)
Note: Rough‐diamond demand has been converted from polished‐diamond demand using historical ratio of rough‐diamond and polished‐diamond values
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Annual production ‐ Carats Source: Kimberley Process
159 176 176 168 163 120 133 128 130 20 40 60 80 100 120 140 160 180 200 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Millions Botswana DRC South Africa Angola Zimbabwe Russia Australia Canada Others 122 124
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Bain & Company – The Global Diamond Report 2013
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Bain & Company – The Global Diamond Report 2015
Inventory accumulation led to a fall in polished prices starting in 2014, with rough prices following
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*world revenue and ct proportions estimated
47% 27% 2% 47% 11% 5% 79% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% World Ct* Luc Ct World Revene* Luc Revenue +10.8ct +2ct +.1 <.1
Carat Production Profile Revenue Profile