Reserves & Resources

Mineral Resources

An updated Mineral Resource Estimate was completed by Mineral Services Canada Inc. and published by Lucara on June 26th, 2018. The estimate is based on historical evaluation data combined with new sampling results (microdiamond, bulk density and petrography) from recent deep core drilling and from historical drill cores. New delineation drill coverage and review of historical drill cores supported an update of the internal geological model. Production data (including a controlled production run from the EM/PK(S) unit) and recent sales / valuation results have been incorporated into the grade and value estimates, which have been made based on an updated model of process plant recovery efficiency.

The updated Mineral Resource (Table 1a), valid at the cut-off date of 26 December 2017, includes a recoverable Indicated Mineral Resource at a 1.25 mm bottom cut off size of 7.9 million carats hosted in 57.85 million tonnes at an average grade of 13.7 cpht with an average modeled diamond value of US$ 673 per carat. The new base of the Indicated Mineral Resource is 400 masl (600 metres below surface). The updated Mineral Resource also includes a recoverable Inferred Mineral Resource of approximately 1.17 million carats hosted in 5.84 million tonnes at an average grade of 20 cpht with an average modeled diamond value of US$716 per carat between 400 masl to 256 masl (base of current geological model). The updated recoverable Indicated Mineral Resource for the South Lobe is presented in Table 1b, valid at a cut off date of 26 December 2017.

Table 1a: Statement of Remaining Mineral Resources in the AK06 kimberlite

The reported resources are those remaining (including stockpile material) as of 26 December 2017.

Table 1b: Statement of Remaining Indicated Mineral Resources in the South Lobe: AK06 kimberlite

1. m3 = million cubic metres, 2. tpm3 = tonnes per cubic metre, 3. Mt = million tonnes, 4. Mct = million carats, 5.cpht = recoverable (+1.25 mm) carats per hundred tonne, 6. $/ct = recoverable (+1.25 mm) United States dollars per carat. Tonnage, grade and value estimates are based on updated Mineral Resource Estimate prepared by MSC under the supervision of Dr. Tom Nowicki of Mineral Services Canada Inc. a “Qualified Person” within the meaning of NI 43-101 and independent of Lucara. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The AK06 mining licence (ML2008/6L) expires in May 2023. The mining licence will have to be renewed for the underground development at AK06 to progress.

Mineral Reserves

Mineral Reserve estimation is based on the updated Indicated Mineral Resource estimate. Inferred Resources have not been used to estimate Mineral Reserves. The Resource to Reserve conversion was performed by Lucara by conducting an open pit optimisation, using Whittle Four-X software. The outputs of this process include a mining schedule on which to base plant capacity, waste rock quantities, peak capacities and mining fleet parameters. It should be noted that the Whittle optimisation is ongoing and consideration is being given by Lucara to revise the mining schedule by not mining a portion of the North Lobe, portions of which may be sub-economic at depth due to dilution.

A trade-off study on the capital cost, plant efficiencies and size-revenue curve, indicated that the optimum bottom size cut-off for the project is 1.25 mm, and this is currently the bottom screen size cut-off in the Karowe plant. Mineral Reserves were estimated for the AK6 pipe, and active stockpile materials.

In addition to defining the optimal pit shell, a double revenue pit shell was defined during the Feasibility Study in 2010. Double revenue sensitivity is performed to anticipate upswings in the future diamond market, providing a guide as to where the surface infrastructure, waste rock dumps, primary crusher, workshops etc. should be positioned in order to avoid the possibility of any future need for relocation. The location of surface infrastructure has been determined with consideration of the double revenue optimal pit shell.

There are no specific grade control programs. Generally all kimberlitic material within the optimal pit is considered to be economic, and will either be processed directly or stockpiled for possible future processing. Material from the pipe contact is stockpiled into a low grade stockpile for possible future processing. Portions of the pipe have been modelled as being diluted in the geological model, based on core drilling data. However, some diluted portions of the pipe have not been mapped. Mining recovery of 97% and dilution of 4.5% were applied in the optimisation to better simulate the physical operation. Plant recovery was set at 100%. Operating costs used in the Whittle optimisation are based on current contracts for outsourced mining and ore processing. Inter-ramp slope angles were derived from geotechnical work. These angles have been flattened by six degrees in basalt and nine degrees in kimberlite and sandstones to make allowance for haul roads.

The Mineral Reserve Statement is presented in Table 1-3.

Table 1-3

Mineral Reserve Statement

Statement of the estimated remaining Mineral Reserve in the AK6 kimberlite Life of Mine optimal pit as of the 26th December, 2013. LOM SP - Life of Mine Stockpile.

  1. Based on the updated Mineral Resource estimate (1.25mm bottom cut off size)
  2. Diamond price is based on diamonds recoverable with current Karowe plant process and November 2013 Price Book
  3. Rounding has been applied
  4. Dilution of 4.5% and Mining Recovery of 97% applied
  5. Mineral Reserve excludes loose stocks in pit and low grade stockpiles