TIDM0QUI
RNS Number : 6209T
Lucara Diamond Corp
16 November 2023
November 15, 2023
NEWS RELEASE
LUCARA ANNOUNCES EXTENSION OF WORKING CAPITAL FACILITY TO
DECEMBER 15, 2023 AND $15 MILLION DRAW FROM SHAREHOLDER LIQUIDITY
GUARANTEE
VANCOUVER, November 15, 2023 /CNW/ (LUC - TSX, LUC - BSE, LUC -
Nasdaq Stockholm)
Lucara Diamond Corp. ("Lucara" or the "Company") announces a
further 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 December 15, 2023 (the "Longstop
Date"). An earlier extension granted by the Lenders on October 31,
2023, was due to expire on November 15, 2023. The Company also
announces that it has fully drawn the $15 million liquidity support
guarantee provided by its largest shareholder, Nemesia S.a.r.l.
("Nemesia") and issued 450,000 common shares as consideration for
this funding.
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 further extension of the WCF maturity and
deferral of the CORA requirement to the Longstop Date, the
Company's largest shareholder, 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 extension of the Liquidity Guarantee to the Longstop
Date remain the same, and no further consideration is payable to
Nemesia for the extension. The TSX has approved the Liquidity
Guarantee.
In August 2023, t he Company issued a debenture (the
"Debenture") to Nemesia and issued 450,000 common shares to Nemesia
as a fee upon execution of the Debenture. On November 14, 2023, the
Company drew $15.0 million from the Debenture and issued a further
450,000 common shares to Nemesia as consideration for the liquidity
support provided. 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 common shares in connection with the execution and draw down
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 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 November 15, 2023 at 2pm 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.
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 nine months ended September
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
MSCEAAFSFFKDFAA
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November 16, 2023 02:00 ET (07:00 GMT)
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