TIDM0QUI
RNS Number : 3440M
Lucara Diamond Corp
11 May 2020
PRESS RELEASE
LUCARA ANNOUNCES Q1 2020 RESULTS
VANCOUVER, May 7, 2020 /CNW/ - (LUC - TSX, LUC - BSE, LUC -
Nasdaq Stockholm)
Lucara Diamond Corp. ("Lucara" or the "Company") today reports
its results for the quarter ended March 31, 2020.
HIGHLIGHTS FOR THE QUARTERED MARCH 31, 2020
-- As at March 31, 2020, the Company had cash and cash
equivalents of $27.4 million, an increase of $16.2 million from
December 31, 2019. The Company maintained draws totalling $19.0
million on the working capital facility from Q1 2020. A balance of
$31.0 million is available to be drawn for working capital, if
required, subsequent to March 31, 2020. The Company begins the
second quarter with a strong cash position and available
liquidity.
-- A strong operating environment prevailed at the Karowe Mine
in Q1 and delivered results consistent with the 2020 plan and
budget:
o Ore and waste mined of 0.9 million tonnes and 1.2 million
tonnes respectively
o 0.64 million tonnes of ore processed resulting in 91,536
carats recovered, achieving a recovered grade of 14.3 carats per
hundred tonnes
o 190 Specials (+10.8 carats) were recovered from direct milling
during the first quarter, representing 6.7% weight percentage of
total direct milling recovered carats, in line with mine plan
expectations
o 8 diamonds were recovered greater than 100 carats in
weight
-- In early February 2020, an unbroken 549 carat white diamond
of exceptional purity was recovered from direct milling of ore
sourced from the EM/PK(S) unit of the South Lobe. This diamond was
not made available for sale in Q1.
-- Total revenue of $34.1 million was recognized in Q1 2020 (Q1
2019: $48.7 million) or $396 per carat (Q1 2019: $512 per carat)
from the sale of 86,178 carats (Q1 2019: 95,053 carats). The Q1
2020 tender represents the smallest planned sale for the year and
reflects a reduction in realized prices in the larger size classes
compared to those achieved from the equivalent period in 2019.
-- The Company recorded a net loss of $3.2 million for Q1 2020
resulting in a $0.01 loss per share for the quarter. This compares
to net income of $7.4 million for Q1 2019 and earnings per share of
$0.02. A decrease in total revenue had the most significant impact
on the current quarter's results.
-- Cash flow from operations in Q1 2020 totalled $2.4 million
compared to cash flow from operations of $10.6 million in Q1 2019,
largely due to a weaker pricing environment and a decrease in
revenue between the periods.
-- The value of the rough diamonds transacted through the Clara
platform in Q1 2020 was $3.0 million over six sales, which brings
the total value transacted on the platform between December 2018
and March 2020 to $12.1 million.
-- Operating cash cost(1) per tonne of ore processed for the
three months ended March 31, 2020 was $31.43 per tonne (Q1 2019:
$30.52 per tonne), which is below the initial full year forecast
cash cost of $32-$36 per tonne processed but 3% higher than the
comparative quarter last year. The operating cash cost per tonne
processed in Q1 2020 was positively impacted by a favourable
foreign exchange rate and the benefits of cost optimization efforts
undertaken in the second half of 2019, offset by a 16% decrease in
tonnes processed as compared to Q1 2019.
-- A continued focus on operational discipline at Karowe has
resulted in a strong operating margin of 49% year to date (Q1 2019:
67%) and adjusted EBITDA(1) year to date of $8.1 million (Q1 2019:
$23.4 million). Operating expenses per carat sold totalled $201 per
carat in the three months ended March 31, 2020, up from $169 per
carat sold in the comparable period last year. Total carats sold
were approximately 10% less by volume than the same quarter last
year (Q1 2020: 86,178 carats sold; Q1 2019: 95,053 carats
sold).
-- In January 2020, Lucara entered into an unprecedented
collaboration with Louis Vuitton ("LV"), the famous luxury house,
and the HB Company ("HB"), a diamond manufacturer from Antwerp, to
manufacture its historic, record setting, 1,758 carat Sewelô
diamond recovered from the Karowe Mine in Botswana in April 2019.
Lucara will receive an upfront non-material payment for the Sewelô
and retain a 50% interest in the individual polished diamonds that
result. Further, 5% of all retail sales proceeds generated from
this historic collection will be invested directly back into
Botswana on community-based initiatives undertaken by Lucara.
(1) See Non-IFRS measures
Eira Thomas, President & CEO commented: "I am extremely
proud and heartened by the efforts of our employees, contractors,
partner communities and governments who have all come together and
taken swift action in support of Lucara's COVID-19 crisis
management strategy, designed to keep our people safe and our mine
operating. Declared an essential service by the government on April
2, Karowe continues to operate safely and at full production.
Demand for our product, however, continues to be weak and Lucara is
necessarily focused on cost management and capital discipline
through this period of uncertainty. To this end, Lucara's capital
spending program for 2020 is now being re-scoped to focus on
critical path elements, largely in support of our ongoing,
underground expansion program. As a reminder, Lucara entered this
crisis with a strong balance sheet and no debt. As a further
positive development, Lucara's $50 million credit facility with the
Bank of Nova Scotia was recently renewed for another year,
providing the Company with additional flexibility and liquidity to
continue to effectively manage our business through 2020. Though
our near-term outlook on diamond prices remains uncertain, global
rough diamond production curtailments combined with early
indications of polished diamond demand recovery in Asia provide
some optimism that demand will improve in the latter half of the
year."
COVID-19 RESPONSE & RECENT DEVELOPMENTS
In March 2020, the Company implemented a crisis management
strategy in relation to COVID-19, to protect the health and
well-being of its employees in Botswana and Canada and to protect
the financial well-being of the business. The Karowe Mine remains
fully operational, under new measures and guidelines implemented by
the Government of Botswana in late March 2020. These measures
designate mining as an essential service in Botswana and include
increased travel restrictions, reduced overall staffing levels and
increased and appropriate social distancing. 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, the
Company's ability to complete tenders in Botswana is expected to 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 the first of four planned diamond tenders for
the year on March 5(th) , 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. 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 suspended its 2020 guidance until further
notice.
Lucara's second quarter tender, originally scheduled for mid-May
2020, has been postponed and will be re-scheduled to a more
appropriate date in the near-term, as market conditions are
evaluated. The Clara digital sales platform, which allows for
buyers to place orders without physically viewing the goods and to
purchase only the diamonds they need on a stone by stone basis,
continues to hold sales. Travel restrictions in Botswana, South
Africa, India and Europe have caused disruptions during April
preventing some deliveries from taking place.
Lucara's planned capital spending program for 2020 is largely
focused on the initiation of our Karowe underground expansion
project and was previously designed to ramp up in Q3, funded
entirely from cash-flow, under a budget of $53 million. Given the
present uncertainty related to our 2020 revenue forecast, this
program is being re-scoped and reduced to focus on critical-path
items through the remainder of the year. The underground expansion
program has an estimated capital cost of $514 million and a five
year period of development. The Company expects to finance part of
the capital cost with debt and the balance from cash flow generated
by operations. In light of the uncertainty resulting from the
COVID-19 pandemic, the Company is also reviewing its original
estimates and assumptions for the quantum and timing of cash flows
expected from the current operations against the anticipated
financing requirement for the underground expansion program.
The Company's $50 million revolving term working capital
facility with the Bank of Nova Scotia has been extended by one year
to May 5, 2021. The Bank of Nova Scotia has first ranking security
by way of a charge over the Company's Karowe assets and a guarantee
by the Company's subsidiaries, which hold the Karowe assets. As
part of the extension, and until Lucara obtains greater clarity on
its cash flow projections in the short-term, Lucara has agreed to
limit capital expenditures related to the underground expansion
project. The extension of this facility provides an important
source of liquidity to Lucara during a period of significant
uncertainty in global markets.
FINANCIAL HIGHLIGHTS
Three months ended March 31
In millions of U.S. dollars, except carats or otherwise noted 2020 2019
--------------------------------------------------------------- -------------- --------------
Revenues $ 34.1 $ 48.7
Net income (loss) for the period (3.2) 7.4
Earnings (loss) per share (basic and diluted) (0.01) 0.02
Operating cash flow per share* 0.02 0.05
Cash on hand 27.4 17.9
Amounts drawn on the working capital facility 19.0 Nil
Average price per carat sold ($/carat)* 396 512
Operating expenses per carat sold ($/carat)* 201 169
Operating margin per carat sold ($/carat)* 195 343
Carats sold 86,178 95,053
---------------------------------------------------------------- -------------- --------------
(*) Operating cash flow per share, average price per carat sold,
operating expenses per carat sold and operating margin per carat
sold are Non-IFRS measures.
The Company recognized revenue of $34.1 million or $396 per
carat from the sale of 86,178 carats in the first quarter of 2020,
inclusive of all diamonds sold on Clara. The average price per
carat sold was $396 per carat yielding an operating margin of $195
per carat (49%). The number of carats sold in Q1 2020 decreased by
10% compared to Q1 2019. The decrease in the average price per
carat sold and in total revenue achieved in Q1 2020 was due to a
combination of variability in quality of the stones available for
sale in the Q1 2020 tender along with lower achieved prices similar
to those realized in mid-2019.
During the first quarter, the Company entered into a binding
term sheet with Louis Vuitton and the HB Company to manufacture the
historic 1,758 carat Sewelô diamond recovered in April 2019.
Sewelô, which means "rare find" in Setswana, is the second, +1,000
carat diamond recovered from Karowe in four years and the largest
ever recovered in Botswana. The diamond has been characterized as
near gem of variable quality, with recent analysis confirming that
it also includes domains of higher-quality white gem. Lucara
believes that the full potential of the Sewelô will only be
revealed once polished. The purpose of this unprecedented
collaboration between a miner, a cutting edge manufacturer and a
large luxury brand will be the planning, cutting and polishing of a
collection of diamonds from Sewelô.
While most of Karowe's diamond production is sold through sales
tenders, beginning in late 2018 certain stones from Karowe's
production sized between 1 and 10 carats and of better quality were
offered for sale on Clara, Lucara's revolutionary, web based,
digital sales platform that allows customers to purchase rough
diamonds individually, based on specific demand. Six sales were
completed on the platform during the first quarter of 2020 with
$3.0 million in value transacted. The customer base of Clara grew
significantly in the fourth quarter of 2019 and continues to grow
at a strong pace with an increase of 19% in the number of
participants. The addition of third-party production to the
platform has been delayed due to significant disruptions resulting
from the COVID-19 pandemic. While this remains an objective for
2020, the nature and timing of this onboarding is presently
uncertain.
Operating expenses increased from $16.1 million in the three
months ended March 31, 2019 to $17.3 million in the three months
ended March 31, 2020 mainly due to an increase in the average cost
per tonne mined due to lower volumes of total tonnes mined. Waste
tonnes mined decreased as compared to the same period in 2019 as
the significant waste stripping campaign ("Cut 2") which started in
2017 was substantially completed in Q1 2019. The combination of a
decrease in the number of carats sold and an increase in operating
expenses resulted in an overall increase in the operating expense
per carat sold from $169/carat in the three months ended March 31,
2019 to $201/carat in the three months ended March 31, 2020.
Depletion and amortization, a non-cash expense, decreased from
$11.6 million for the three months ended March 31, 2019 to $10.5
million for the three months ended March 31, 2020 due to a 10%
lower volume of carats sold. The decrease in revenue in the first
quarter of 2020 compared to the first quarter of 2019 generated a
similar decrease to Adjusted Earnings Before Interest, Tax,
Depletion and Amortization ("Adjusted EBITDA") (*Non-IFRS measure),
net income and earnings per share when comparing results from each
quarter.
Operations in the first quarter of 2020 were consistent with the
strong, stable operating environment achieved at the Karowe Mine in
2019. Ore tonnes mined (0.9 million tonnes) and waste tonnes mined
(1.2 million tonnes) were on plan for the first quarter. The plant
processed 0.64 million tonnes during the first quarter, also
consistent with the 2020 plan. The total tonnes processed in 2020
are expected to be slightly less than the record 2.8 million tonnes
processed in 2019 due to several planned multi-day shut-downs to
upgrade the XRT technology which is a key part of the recovery
circuit at the Karowe Mine. Despite the challenges presented by the
COVID-19 pandemic, as at May 7, 2020 the Karowe Mine continues to
operate at full production levels, with social distancing and other
critical health and safety measures designed to limit the spread of
the virus being observed.
A recovery in the pricing environment for both polished and
rough diamonds which began in late-2019 has been severely impacted
by the COVID-19 pandemic and as a result, several large and small
diamond producers have placed their operations on care &
maintenance and deferred or cancelled regularly scheduled sales due
to economic uncertainties and logistical challenges resulting from
an unprecedented, global "lock-down". Karowe's annual production
represents a small fraction of the global rough diamond supply that
is mined and sold each year. Buyers of Karowe diamonds do not have
firm purchasing commitments so they are free to bid only on the
diamonds which are of interest to them. This system benefits both
Lucara and its customers and typically results in competitive
pricing for Karowe goods. Diamonds mined from Karowe are sold
either through a quarterly tender in Botswana or through the Clara
digital sales platform. The Government of Botswana has granted
temporary permission to the Company to conduct sales in Antwerp,
Belgium and the second quarter tender which was originally
scheduled to close mid-May in Botswana is expected to be
rescheduled and will be held in Antwerp, as soon as market
conditions permit. Clara has continued sales during the global
"lock-down" but has encountered some difficulties in delivering
certain goods purchased due to restrictions on travel and
non-essential work implemented by many countries. However, these
restrictions are anticipated to be scaled-back in many countries in
the coming weeks. Clara represents a unique opportunity to purchase
rough diamonds without the requirement to travel.
QUARTERLY RESULTS OF OPERATIONS - KAROWE MINE, BOTSWANA
UNIT Q1-20 Q4-19 Q3-19 Q2-19 Q1-19
Sales
Revenues generated
from sales tenders
conducted in the
quarter US$M 33.8 56.0 45.3 42.5 48.7
Carats sold for revenues
recognized during
the period Carats 86,010 98,547 116,200 101,931 95,057
Average price per
carat for proceeds
received during the
period US$ 393 568 390 417 512
Production
Tonnes mined (ore) Tonnes 878,087 694,591 823,875 773,861 1,011,048
Tonnes mined (waste) Tonnes 1,199,660 740,593 1,489,668 1,826,972 2,485,548
Tonnes processed Tonnes 639,430 647,502 680,665 713,037 763,313
cpht
Average grade processed (*) 14.3 13.3(1) 13.9(2) 14.2(3) 15.9(4)
Carats recovered Carats 91,536 86,422(1) 104,990(2) 109,312(3) 132,336(4)
Costs
Operating costs per
carats sold (see
Non-IFRS measures) US$ 201 209 201 174 169
Sustaining capital
expenditures US$M 2.4 13.0 0.7 1.4 2.4
Underground expansion US$M 1.7 - - - -
project
-------------------------- -------- ---------- ---------- ----------- ----------- -----------
(*) carats per hundred tonnes (1) Carats recovered during the period
included 273 carats recovered from re-processing historic recovery
tailings from previous milling and are excluded from the average
grade processed. (2) Carats recovered during the period included
10,646 carats recovered from re-processing historic recovery tailings
from previous milling and are excluded from the average grade processed.
(3) Carats recovered during the period included 8,172 carats recovered
from re-processing historic recovery tailings from previous milling
and are excluded from the average grade processed. (4) Carats recovered
during the period included 10,899 carats recovered from re-processing
historic recovery tailings from previous milling and are excluded
from the average grade processed.
FIRST QUARTER OVERVIEW - KAROWE MINE
Safety: Karowe had no lost time injuries during the three months
ended March 31, 2020 resulting in a twelve-month rolling Lost Time
Injury Frequency Rate of 0.
Production : Ore and waste mined during the three months ended
March 31, 2020 totaled 0.9 million tonnes and 1.2 million tonnes
respectively. Tonnage processed was 0.64 million tonnes, with a
total of 91,536 carats recovered. During Q1 2020, ore processed was
almost entirely from the South lobe and a total of 190 Specials
were recovered including 8 diamonds greater than 100 carats in
weight. Recovered Specials equated to 6.7% weight percentage of
total recovered carats from ore processed during Q1 2020,
consistent with expectations.
Overall performance during the first quarter remains consistent
with the strong operational results achieved over the past two
years. Processing capacity was slightly lower in Q1 2020 compared
to previous quarters due to a planned extended shutdown in early
March for improvements to the XRT technology in the process plant.
Continuous improvements to maintenance scheduling and better
availability of equipment offset some of the additional downtime
required in Q1 2020. Mining and processing results were on plan
during Q1 2020.
Karowe's operating cash cost: Karowe's year to date operating
cash cost (*Non-IFRS measure) was $31.43 per tonne of ore processed
(YTD 2019: $30.52 per tonne of ore processed) below the initial
full year forecast of $32-$36 per tonne processed, and
approximately 3% higher than the same period in 2019. The current
period result includes the impact of a 5% depreciation of the
Botswana Pula compared to the US Dollar reporting currency, and
realized cost savings following a cost optimization process in the
second-half of 2019, offset by a 16% decrease in tonnes processed
as compared to Q1 2019.
Significant diamond recoveries: In early February 2020, an
unbroken 549 carat white diamond of exceptional purity was mined
from the EM/PK(S) unit of the South Lobe and was recovered in the
Mega Diamond Recovery XRT circuit. A decision on the sale of this
special diamond will be undertaken in due course.
KAROWE UNDERGROUND UPDATE
On November 4, 2019, the Company announced the results of a
Feasibility Study for an underground mine at Karowe. A copy of the
Company's news release and the related technical report prepared
pursuant to the requirements of NI 43-101 - Standards of Disclosure
for Mineral Projects were filed on Sedar (www.sedar.com) and are
available on the Company's website at: www.lucaradiamond.com .
In November 2019, Lucara's Board of Directors approved a $53
million capital program for the Karowe underground expansion
project, with the majority of the budget scheduled to be spent in
the latter part of the year and funded through the cash flow from
current operations. During Q1 2020, $1.7 million was spent on
project execution activities including detailed engineering and
design work and early procurement initiatives.
Given the uncertainty in global markets resulting from COVID-19,
the originally planned capital budget will be reduced until more
certainty exists around Lucara's cash flow projections. The 2020
program is now being re-scoped to focus on critical-path items for
the remainder of the year. Activities are focused on procurement of
long lead time equipment, engineering and design work, physical
site activity using local contractors for site preparation and
geotechnical studies.
The Company is continuing to explore debt financing options for
the underground expansion for those amounts which are expected to
exceed the Company's cash flow from operations during the
construction period. The underground expansion program has an
estimated capital cost of $514 million and a five year period of
development. In light of the uncertainty resulting from the
COVID-19 pandemic, the Company is also reviewing its original
estimates and assumptions for the quantum and timing of cash flows
expected from the current operations against the anticipated
financing requirement for the underground expansion program.
CLARA
Further sales on Clara are planned for the remainder of 2020,
subject to the existence of demand and Clara's ability to complete
delivery of the stones purchased. The timing to onboard third-party
production, a key objective for 2020, is uncertain presently due to
the unprecedented global upheaval which has resulted in response to
the COVID-19 pandemic.
2020 OUTLOOK
This section of the press release provides management's
production and cost estimates for 2020. These are "forward-looking
statements" and subject to the cautionary note regarding the risks
associated with forward-looking statements.
On March 31, 2020, the Company announced the suspension of its
2020 guidance until further notice. The full impact of the COVID-19
pandemic on Lucara's operations and production outlook for 2020
remains highly uncertain and may remain that way for several
months. Further guidance will be released as the impact of COVID-19
becomes known.
The global diamond industry is experiencing the widespread
impacts of COVID-19 throughout the value chain, manifested as fewer
sales, weaker pricing, logistical challenges/delays in the movement
of goods and people and, production curtailments at several mines.
Following the Company's first quarterly tender which closed on
March 5, 2020, diamond prices have continued to deteriorate in
response to weaker demand as COVID-19 has continued to spread
globally and governments have implemented a variety of restrictions
on the movement of people and goods in an effort to curtail its
spread. While full production levels are currently being sustained
at the Karowe Diamond Mine, Lucara cannot predict if future changes
or regulations implemented by the Government of Botswana will
affect its operations in the near term. As a temporary measure, in
response to the COVID-19 crisis, the Government of Botswana has
granted Lucara permission to hold diamond sales in Antwerp, Belgium
if required.
Lucara's second quarter tender, originally scheduled for mid-May
2020, has been postponed and will likely be re-scheduled in the
coming weeks, pending an evaluation of the market conditions closer
to the time. Sales are continuing on the Clara platform, although
disruptions have been experienced during April due to certain
travel restrictions in Botswana, South Africa, India and Europe
which have prevented some deliveries from taking place.
Lucara's capital spending program for 2020 is also being
re-scoped to focus on critical-path items through the remainder of
the year. Most of the previously approved capital spend of $53
million for the Karowe underground expansion project was scheduled
to be invested in the latter part of the year and funded through
cash flow from operations. Given the uncertainty in global markets
resulting from COVID-19, these capital expenditures will be reduced
until more certainty exists around Lucara's cash flow
projections.
CONFERENCE CALL
The Company will host a conference call and webcast to discuss
the results on Friday, May 8, 2020 at 6:00 a.m. Pacific, 9:00 a.m.
Eastern, 2:00 p.m. UK, 3:00 p.m. CET.
CONFERENCE CALL:
Please call in 10 minutes before the conference call starts and
stay on the line (an operator will be available to assist you).
Conference ID:
36146504 / Lucara Diamond
Dial-In Numbers:
Toll-Free Participant Dial-In North
America (+1) 888 390 0546
All International Participant Dial-In (+1) 778 383 7413
Webcast:
To view the live webcast presentation, please log on using this
direct link:
https://produceredition.webcasts.com/starthere.jsp?ei=1308278&tp_key=664b5059a3
The presentation slideshow will also be available in PDF format
for download from the Lucara website www.lucaradiamond.com shortly
before the conference call.
Conference Replay:
A replay of the telephone conference will be available two hours
after the completion of the call until May 15, 2020.
Replay number (Toll Free North America) (+1) 888 390 0541
Replay number (International) (+1) 416 764 8677
The pass code for the replay is: 146504#
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:
North America Christine Warner, Investor Relations & Communications
+1 604 689-7842 | info@lucaradiamond.com
Sweden Robert Eriksson, Investor Relations & Public
Relations
+46 701 112615 | reriksson@rive6.ch
UK Public Relations Emily Moss / Jos Simson, Tavistock
+447788554035 | lucara@tavistock.co.uk
ABOUT LUCARA
Lucara is a leading independent producer of large exceptional
quality Type IIa diamonds from its 100% owned Karowe Mine in
Botswana and owns a 100% interest in Clara Diamond Solutions, a
secure, digital sales platform positioned to modernize the existing
diamond supply chain and ensure diamond provenance from mine to
finger. The Company has an experienced board and management team
with extensive diamond development and operations expertise. The
Company operates transparently and in accordance with international
best practices in the areas of sustainability, health and safety,
environment, and community relations.
ABOUT CLARA
Clara Diamond Solutions Limited Partnership (Clara), wholly
owned by Lucara Diamond Corp, is 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.
The information in this release is accurate at the time of
distribution but may be superseded or qualified by subsequent news
releases.
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 May 7, 2020 at 2:00pm Pacific Time.
NON-IFRS MEASURES
This news release refers to certain financial measures, such as
operating cash flow per share, adjusted EBITDA, average price per
carat sold, operating cost per carat sold, operating margin per
carat sold and operating cost per tonne of ore processed which are
not measures recognized under IFRS and do not have a standardized
meaning prescribed by IFRS. These measures may differ from those
made by other corporations and accordingly may not be comparable to
such measures as reported by other corporations. These measures
have been derived from the Company's financial statements, and
applied on a consistent basis, because the Company believes they
are of assistance in the understanding of the results of operations
and financial position. Please refer to the Company's MD&A for
the first quarter, 2020 for an explanation of non-IFRS measures
used.
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, this release may contain forward looking
information pertaining to the following: the impact of COVID-19 on
the Company's cash flows and operations and its plans with respect
to the Karowe underground expansion project; 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; exploration and development
expenditures and reclamation costs; expectation of diamond prices;
changes to foreign currency exchange rates; assumptions and
expectations related to the possible development of an underground
mining operation at Karowe including associated capital costs,
financing strategies and timing; expectations in respect of the
development and functionality of the technology related to the
Clara platform, the intended benefits and performance of the Clara
platform, including ability to complete sales without viewing
diamonds, the growth of the Clara platform, the timing and
frequency of sales on the Clara Platform, and the quantum and
timing of participation of third parties on the Clara platform;
expectations regarding the need to raise capital and its
availability; possible impacts of disputes or litigation and other
forward looking information.
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,
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), 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
QRFUPUMWAUPUGBM
(END) Dow Jones Newswires
May 11, 2020 02:00 ET (06:00 GMT)
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