Mr. William Lamb reports

LUCARA ANNOUNCES EXTENSION OF WORKING CAPITAL FACILITY TO NOVEMBER 15, 2023

Lucara Diamond Corp. has extended in the short term the maturity of its $50-million senior secured working capital facility and has deferred the requirement to place $52.9-million in a cost overrun reserve account to the earlier of the conclusion of discussions with its lenders or Nov. 15, 2023. An earlier extension granted by the lenders on Aug. 23, 2023, was due to expire on Nov. 1, 2023.

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 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 second extension of the WCF maturity and deferral of the cora requirement, the company's largest shareholder, Nemesia Sarl, 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 while discussions with the lenders continued. The company is required to maintain a minimum cash balance of $10.0-million. The terms of the second extension of the liquidity guarantee remain the same, and no further consideration is payable to Nemesia for the extension. The Toronto Stock Exchange has conditionally approved the extension of the liquidity guarantee.

In August, 2023, the company issued a debenture to Nemesia, which will be drawn down if Nemesia is required to make a payment under the liquidity guarantee. In consideration for providing the liquidity guarantee, Lucara issued 450,000 common shares as a fee upon its execution. A further 450,000 common shares will be issuable should the liquidity guarantee be called upon in the event the company's cash balance decreases below $10.0-million. 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 its provision of the liquidity guarantee and the receipt of the debenture and 450,000 common shares in connection with the execution 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). 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 per cent of the company's market capitalization. A material change report in respect of the first waiver and extension, including the provision of the liquidity guarantee and the debenture, was filed on Sept. 1, 2023.

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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