Lucara Secures Funding for Karowe Mine Expansion

Lucara Diamond Corp. signed loan documents relating to its recently agreed senior secured project financing in the amount of US $ 220 million between Lucara Botswana Proprietary Ltd, as borrower, and a syndicate of five mandated principal arrangers (MLA ).

The MLAs are: African Export-Import Bank (Afreximbank), Africa Finance Corp., ING, Natixis and Société Générale, London branch. Afreximbank acts as a facility agent under the facilities.

The facilities consist of two tranches: a US $ 170 million project finance facility to finance the development of the underground project and a US $ 50 million working capital facility to refinance the company’s existing debt and support operations. In progress. The facilities, combined with the company’s latest equity financing (totaling approximately US $ 30 million) and the projected cash flow from the Karowe open pit mine during the underground construction period, enables the underground expansion project. de Karowe (PMU) to be fully funded.

Eira Thomas, President and CEO, comments:

Lucara is delighted to move forward with a fully funded underground expansion project, extending the life of the Karowe mine to at least 2040 and forecasting to generate at least US $ 4 billion in revenue. additional using conservative diamond price assumptions. Obtaining credit commitments for the US $ 220 million senior debt facility arrangement from five leading international financial institutions, with extensive backgrounds and experience in mining and Metals in Africa, is a significant achievement for Lucara and reflects confidence in Karowe’s great stone resources and the considerable efforts undertaken over the past five years to delineate and define this attractive and highly economic growth opportunity for the company. It also reflects the confidence in the strong, safe and reliable operating environment that has prevailed at Karowe over the past 8 years, adhering to high ESG standards and striving to deliver economic benefits to long term in Botswana and the communities in which we operate. . The development of the underground expansion project will comply with all required environmental regulations and respect Equator Principles.

“As a final comment, we believe this expansion plan comes at the right time in the market cycle, with improving supply and demand fundamentals helping to stabilize and support stronger diamond prices. short and long term. The Karowe mine remains one of the highest margin diamond mines in the world, having produced 5 of the 10 largest diamonds in recorded history and is the only mine to have recovered three diamonds greater than 1000 carats.

The first facility drawdown is expected to take place early in the third quarter of this year, following satisfaction of certain conditions precedent customary to financing of this nature, including closing and receipt of the initial capital contribution.

Under the facilities, the main shareholder of the company, Nemesia Sarl, has undertaken to provide a limited support commitment in the event of a funding gap occurring up to 36 months from the financial close.

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