TIDM0QUI
RNS Number : 9564R
Lucara Diamond Corp
01 November 2023
October 31, 2023
NEWS RELEASE
LUCARA ANNOUNCES EXTENSION OF WORKING CAPITAL FACILITY TO
NOVEMBER 15, 2023
VANCOUVER, October 31, 2023 /CNW/ (LUC - TSX, LUC - BSE, LUC -
Nasdaq Stockholm)
Lucara Diamond Corp. ("Lucara" or the "Company") announces the
short-term extension of the maturity of its $50 million senior
secured working capital facility (the "WCF") and a deferral of the
requirement to place $52.9 million in a cost overrun reserve
account (the "CORA") to the earlier of the conclusion of
discussions with its Lenders or November 15, 2023. An earlier
extension granted by the Lenders on August 23, 2023, was due to
expire on November 1, 2023.
The Company's debt package consists of two facilities (the
"Facilities"), a project finance facility of $170 million to fund
the development of an underground expansion at the Karowe Mine (the
"Project Loan"), and the WCF which is used to support ongoing
operations. Presently, $90 million is drawn from the Project Loan
and $35 million is drawn from the WCF. The terms of the WCF
extension do not permit further draws from either the Project Loan
or the WCF. The CORA balance is currently $18.4 million. All
currency figures are in U.S. Dollars, unless otherwise stated.
In connection with the second extension of the WCF maturity and
deferral of the CORA requirement, the Company's largest
shareholder, Nemesia S.a.r.l. ("Nemesia"), has also agreed to
extend its liquidity support guarantee in favour of the Lenders to
align with the new deadline. In August 2023 as part of the first
WCF extension, Nemesia agreed to provide the Company with liquidity
support of up to $15.0 million in aggregate ("Liquidity Guarantee")
while discussions with the Lenders continued. The Company is
required to maintain a minimum cash balance of $10.0 million. The
terms of the second extension of the Liquidity Guarantee remain the
same, and no further consideration is payable to Nemesia for the
extension. The TSX has conditionally approved the extension of the
Liquidity Guarantee.
In August 2023, t he Company issued a debenture (the
"Debenture") to Nemesia which will be drawn down if Nemesia is
required to make a payment under the Liquidity Guarantee. In
consideration for providing the Liquidity Guarantee, Lucara issued
450,000 common shares as a fee upon its execution. A further
450,000 common shares will be issuable should the Liquidity
Guarantee be called upon in the event the Company's cash balance
decreases below $10.0 million. For each $500,000 drawn down under
the Liquidity Guarantee, the Company will be required to issue,
subject to the receipt of all required regulatory approvals, 7,500
common shares per month to Nemesia until the amounts borrowed are
repaid.
Liquidity Guarantee from Nemesia
Nemesia is an insider of the Company and, as a result of their
provision of the Liquidity Guarantee and receipt of the Debenture
and 450,000 common shares in connection with the execution thereof,
the transaction contemplated by the Liquidity Guarantee was
considered a "related party transaction" under Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions ("MI 61-101"). The Company relied on the
exemptions set forth in sections 5.5(a) and 5.7(a) of MI 61-101
from the valuation and minority shareholder approval requirements
of MI 61-101 in respect of Nemesia's provision of the Liquidity
Guarantee as the aggregate fair market value of the common shares
issued to Nemesia upon signing of the Liquidity Guarantee was less
than 25% of the Company's market capitalization. A material change
report in respect of the first waiver and extension, including the
provision of the Liquidity Guarantee and the Debenture, was filed
on September 1, 2023.
On behalf of the Board,
William Lamb
President and Chief Executive Officer
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For further information, please contact:
Hannah Reynish Investor Relations & Communications
+1 604 674 0272| info@lucaradiamond.com
Sweden Robert Eriksson, Investor Relations & Public
Relations
+46 701 112615 | reriksson@rive6.ch
UK Public Relations Charles Vivian / Jos Simson, Tavistock
+44 778 855 4035 | lucara@tavistock.co.uk
ABOUT LUCARA
Lucara is a leading independent producer of large exceptional
quality Type IIa diamonds from its 100% owned Karowe Diamond Mine
in Botswana. The Karowe Mine has been in production since 2012 and
is the focus of the Company's operations and development
activities. Clara Diamond Solutions Limited Partnership ("Clara"),
a wholly-owned subsidiary of Lucara, has developed 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. Lucara has an
experienced board and management team with extensive diamond
development and operations expertise. Lucara and its subsidiaries
operate transparently and in accordance with international best
practices in the areas of sustainability, health and safety,
environment, and community relations. Lucara has adopted the IFC
Performance Standards and the World Bank Group's Environmental,
Health and Safety Guidelines for Mining (2007). Accordingly, the
development of the Karowe underground expansion project ("UGP")
adheres to the Equator Principles. Lucara is committed to upholding
high standards while striving to deliver long-term economic
benefits to Botswana and the communities in which the Company
operates.
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 October 31, 2023 at 5pm Pacific Time.
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 and
include, without limitation, receipt of regulatory approvals for
the extension and issuance of common shares to Nemesia in
connection with the Liquidity Guarantee; whether any amounts will
be drawn under the Liquidity Guarantee and the timing of the same;
future value to be delivered by the UGP and the Company's ability
to continue as a going concern in the event that the Facilities are
not available to them longer-term.
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. The value of the Company's shares, its financial
results and its mining activities are significantly affected by the
price and marketability of the diamonds recovered. The sales price
of a diamond is determined by its characteristics. While the Karowe
Diamond Mine has produced several large, high-value diamonds in
excess of 100 carats, there is no assurance that the diamonds
recovered which are 100 carats or larger will have the
characteristics required to achieve a high sales price. Statements
with respect to the length by which the Karowe underground
expansion project will extend the life of mine are based on key
underlying assumptions including, but not limited to: future
diamond prices, future diamond recoveries, expected operating and
capital costs, the timing to achieve key construction milestones,
the availability of sufficient financing, people, equipment and
materials when needed for construction and operation of the
underground mine, the economic potential of a mineralized area, the
size and tonnage of a mineralized area, the estimation of mineral
resources.
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 in Note 1 of the condensed interim consolidated
financial statements for the three and six months ended June 30,
2023, and in the related interim MD&A under the headings
"Liquidity and Capital Resources", "COVID-19 Global Pandemic,
Economic and Geopolitical Risks" and under the heading "Risks and
Uncertainties" in the Company's most recent Annual Information
Form, both available at http://www.sedarplus.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, changes in inflation, the supply and demand for,
deliveries of and the level and volatility of prices of rough
diamonds, costs of power and diesel, impacts of potential
disruptions to supply chains, 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.
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END
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