Lucara Diamond Corp.
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Preliminary Diamond Valuation

A valuation of 1,760 carats of diamonds from the AK6 kimberlite was undertaken in Geneva by Shlomo Tidhar of Mercury Diamonds resulting in an overall value for the parcel of US$162 per carat. The diamond parcel included 1,175.7 carats of diamonds recovered from large diameter drill samples that were processed to recover diamonds greater than 1 mm, and 584.5 carats of diamonds recovered from trench samples that were processed to recover diamonds at both a 1 mm and 2 mm cutoff.

Mercury noted that "Overall the diamonds from AK6 are deemed to be of very good quality and very attractive to diamond buyers. Colours are generally very white and the samples showed numerous examples of 'blocky' makeable and strong crystal forms that tend to lead to strong polished yields and demand a premium. There was a significant presence of Type IIA stones including 12+ carat stones that had been broken into 8 or more fragments". Mercury noted significant diamond breakage in the parcel, which is believed to be caused by the drilling and diamond recovery process. In this regard, Mercury commented that "there is much upside valuation potential if breakage were to be reduced and/or eliminated". In considering the extent of diamond breakage, presence of Type IIA stones and comparatively coarse size distribution, Mercury summarized that "In Mercury's opinion, it is reasonable to expect full scale production could produce a value in the US$200 per carat range."

Mercury noted that 34% of the value of the sample was made-up of nine large stones greater than 5 carats.  

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