Mr. William Lamb reports

LUCARA ANNOUNCES EXTENSION OF WORKING CAPITAL FACILITY

Lucara Diamond Corp. has made a short-term extension of the maturity of its $50-million senior secured working capital facility to and has deferred to Nov. 1, 2023, the requirement to place $52.9-million in a cost overrun reserve account by Sept. 2, 2023. The CORA balance is currently $18.3-million. All currency figures are in U.S. dollars, unless otherwise stated.

The company's debt package consists of two facilities: a project finance facility of $170-million to finance the development of an underground expansion at the Karowe mine, and the WCF, which is used to support continuing operations. Currently, $90-million is drawn from the project loan, and $35-million is drawn from the WCF. The terms of the WCF extension to Nov. 1, 2023, do not permit further draws.

In connection with the WCF extension and the CORA deferral, both to Nov. 1, 2023, the company's largest shareholder, Nemesia Sarl, has agreed to provide a liquidity support guarantee in favour of the lenders of up to $15.0-million in aggregate to Oct. 31, 2023, while discussions with the lenders are continuing. In return, the company has agreed to issue a debenture to Nemesia to be drawn down if Nemesia is required to make a payment under the liquidity guarantee. In consideration for providing the liquidity guarantee and subject to receipt of all required regulatory approvals, Lucara has agreed to issue 450,000 common shares as a fee upon execution of the liquidity guarantee and a further 450,000 common shares should the liquidity guarantee be called upon in the event the company's cash balance decreases below $10.0-million. As an additional fee, Lucara has agreed to issue 7,500 common shares per month for each $500,000 outstanding until the amounts borrowed are repaid.

William Lamb, chief executive officer, commented: "During this period of ongoing discussions with our lenders, we appreciate their willingness to grant an extension to the company's working capital facility and a temporary deferral of the cost overrun reserve account requirements to Nov. 1, 2023. This, together with the support of our largest shareholder in providing the liquidity guarantee, allows management to continue its focus on operations and the underground project. The company would like to thank all involved in this process for their time, effort and consideration. The opportunity to expand the operations through the underground development adds significant value to all stakeholders for many years to come."

Liquidity guarantee from Nemesia

Nemesia is an insider of the company, and, as a result of its 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 will be considered a related-party transaction under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). The company intends to rely 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 will be less than 25 per cent of the company's market capitalization.

A material change report in respect of the waiver and extension, including the provision of the liquidity guarantee and the debenture, will be filed in accordance with MI 61-101, but is not expected to be filed 21 days in advance of the execution of the liquidity guarantee as the company wanted to close to implement these arrangements on an expedited basis for sound business reasons.

About Lucara Diamond Corp.

Lucara is a leading independent producer of large exceptional-quality Type 2a diamonds from its 100-per-cent-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, 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 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.

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