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2014 Q4 Highlights

Revenues: During the year the Company had sales totalling 412,136 carats for gross proceeds of $265.5 million at an average price of $644 per carat. The increase in revenues of 47% or $85.0 million compared to the prior year was due to higher prices received for the Karowe diamonds and a larger number of carats being sold in the large exceptional stones tenders, which contributed $135.6 million to revenues. The exceptional stone sales resulted in an average price of $32,471 per carat in 2014 (2013: $24,290 per carat, with the remaining tenders achieving $318 per carat (2013: $249 per carat).

Cash flows and operating margins: The Company's earnings before interest, tax, depreciation and amortization ('EBITDA') (see pages 5 and 9 Non-IRFS measures) for the year were $173.4 million compared to the previous year of $102.9 million. The strong operating margins were largely due to the exceptional stone sales and the Company's focus on cost control, which resulted in a cost per tonne treated (see pages 5 and 9 Non-IRFS measures) of $28 compared to guidance of $31-$33 per tonne.

Net cash position: The Company's year-end cash balance was $100.8 million compared to a cash balance of $49.4 million at the end of 2013. The increase in the Company's cash balance was due to its strong operating cash flows, which more than financed the Company's plant optimization expenditure of $35 million and its dividend payment to shareholders of $27 million during the year. The Company's $50 million credit facility remains undrawn.

Karowe operating performance: Karowe's performance was in line with forecast for the year in terms of ore and waste mined and carats recovered. Karowe recovered 815 special stones (+10.8 carats; 2013 recovery of 732 specials) during the year. This included 27 stones greater than 100 carats (2013: 17 stones) and 4 stones over 200 carats (2013: 4 stones). The plant optimization program is advancing to plan and the plant is expected be commissioned during Q2 2015 within the $55 million forecast cost.

Adjusted Earnings per share and Return on Capital Employed: Adjusted earnings per share (see pages 5 and 9 Non-IRFS measures) was $0.24 per share for the year ended December 31, 2014 (2013: adjusted earnings per share was $0.17) and $0.05 per share for the quarter ended December 31, 2014 (2013: adjusted earnings per share was $0.05).

The Company's strong earnings have resulted in the Company achieving a return on capital employed ('ROCE') (see pages 5 and 9 Non-IRFS measures) of 63% during the year. ROCE increased from 37% in 2013 following the increase in sales from the exceptional stone tender and the Company's operating and capital cost discipline.

Dividends: In 2014, the Company paid a special dividend of CA$ 0.04 per share in addition to its regular dividend of CA$ 0.04 per share. The total dividend paid in 2014 by the Company of US$27 million was equivalent to a dividend yield of 3.7% based on the TSX closing price on December 31, 2014 and a dividend cover of 3.4x using adjusted net income (see page 5 for calculation of adjusted net income).

Mothae divestment: On December 22, 2014, the Company announced it would divest of the Mothae project based on the Company's development strategy and the extensive work conducted on understanding the economics of the asset. The Company does not believe that sufficient shareholder value can be gained through expenditure of current cash reserves on further assessment and development of this project.

Botswana Prospecting Licenses: The Company was awarded two precious stone prospecting licenses within the Orapa Kimberlite field in close proximity to the Karowe Diamond mine during the year. The Company has ordered a bulk sampling plant and will commence work programs on the two prospecting licenses during 2015.

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Stock Info

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Profile


Lucara Diamond Corp. is a new diamond producer. It's two key assets are the Karowe mine in Botswana and the Mothae project in Lesotho. The 100% owned Karowe Mine is a newly constructed state-of-the-art mine which was fully commissioned in Q2 2012 . At the 75% owned Mothae project the company has completed the trial mining stage. The Mothae plant was put on care and maintenance while the Company investigates further development options. Both Mothae and Karowe are large scale assets with tonnage and throughput upside and production has consistently included large, Type IIA stones. Lucara is a member of the Lundin Group of Companies and is listed on the TSX Exchange, NASDAQ OMX Stockholm and the Botswana Stock Exchange under the symbol "LUC".

Mission Statement

To build a leading African-focused diamond production and development company.


Values:

  • A healthy and safe work environment
  • Entrepreneurial spirit
  • Creation of shareholder value
  • Create positive economic and social impact on local communities where we operate
  • Focus on larger-scale advanced diamond projects
  • Seek value opportunities
  • Contribute to the Lundin Group's history of success and excellence in wealth creation for all stakeholders

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2014 Results

2013 Results

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