Mr. William Lamb reports

LUCARA ANNOUNCES SUCCESSFUL EXECUTION OF AMENDED FACILITIES AGREEMENT; KAROWE UNDERGROUND EXPANSION PROJECT REMAINS FULLY FINANCED

Lucara Diamond Corp. has signed amended documentation in relation to the senior secured project financing debt package of $220-million (U.S.) executed in July, 2021. While the total quantum of the facilities has not changed, the repayment profile has been extended in line with the rebase schedule released July 17, 2023. Lucara expects to continue to develop the Karowe underground expansion using funds from the project loan (as hereinafter defined), combined with projected excess cash flow from Karowe open-pit mine operations and stockpiles processed during the underground construction period. Parties to the facilities remain Lucara Botswana Ptd. Ltd. as the borrower and a syndicate of five international financial institutions: African Export-Import Bank (Afreximbank), Africa Finance Corp., ING, Natixis and Societe Generale, London branch. Afreximbank acts as facility agent in connection with the facilities.

The company's debt package consists of two facilities, a project finance facility of $190-million (previously $170-million) to finance the development of an UGP at the Karowe mine, and a $30-million (previously $50-million) senior secured working capital facility, which is used to support continuing operations. The company has drawn $125-million from the project loan and $15-million from the WCF. The balance in the cost overrun reserve account stands at $33.6-million. All currency figures are in U.S. dollars, unless otherwise stated.

William Lamb, president and chief executive officer, commented: "The recent signing of the amended facilities agreement for the Karowe mine's underground development project marks a significant step in our company's exciting transformation. This achievement continues to underscore the exceptional quality of the Karowe asset. The adjusting repayment schedule aligns with the expected cash flow from the underground production profile, where we are set to process the most valuable ore from the underground expansion in the first three years of operations. With the solid financial backing from our largest shareholder, who has provided interim funding and guarantees, we can confirm that the underground expansion project is fully funded. Our dedicated team, combined with the support of our strategic shareholder, positions us to create substantial value for our shareholders through the Karowe mine's underground development project."

Key terms of the project loan:

• Up to $190-million provided to finance the development, construction costs and construction phase operating costs of the UGP, as well as financing costs in relation to the facilities;
• Eight-year maturity, to June 30, 2031, with quarterly repayments commencing on Sept. 30, 2028;
• Interest rate and margin: London interbank offered rate (or replacement benchmark) plus margin of 6.5 per cent annually from rebase date to the project completion, 6.0 per cent annually from project completion to June 30, 2029, and 7.0 per cent annually thereafter;
• Commitment fee: Lucara Botswana to pay 35 per cent of the margin per annum applicable to the project loan facility on the available commitment for the project loan facility;
• CORA: amount of $61.7-million to be financed by June 30, 2025;
• First-ranking security over all assets of the borrower on a fixed and floating basis, as well as all shares in and shareholder loans into the borrower and all shares in and shareholder loans into the intermediary companies between the sponsor and the borrower;
• The project facility will require interest rate hedging of at least 75 per cent of the borrower's exposure to be arranged as a condition subsequent to financial close;
• Positive and negative covenants, including financial ratios, as well as events of default and a cash flow waterfall customary to a financing of this nature, are set out in the amended facilities agreement.

Key terms of the WCF:

• Up to $30-million for a senior, secured WCF for working capital and other corporate purposes of the borrower;
• Interest rate and margin: LIBOR (or replacement benchmark) plus margin of 6.5 per cent annually for the period commencing from the date of the amendment to projection completion, 6.25 per cent from project completion to June 30, 2029, and 7.25 per cent annually thereafter;
• Commitment fee: Lucara Botswana to pay 35 per cent of the margin per annum applicable to the working capital facility on the available commitment for the working capital facility.

Shareholder undertaking from Nemesia

In connection with the amended facilities, the company's largest shareholder, Nemesia Sarl, has agreed to enter into a shareholder guarantee and an amendment to the shareholder standby undertaking, in favour of the lenders, of up to $63.0-million in aggregate, which will support the UGP expansion if the projected cash flows from Karowe operations, combined with funds available from the project loan, are insufficient. The shareholder guarantees may also be drawn in the event of a shortfall in the company's ability to finance the CORA by June 30, 2025. As consideration for providing the shareholder guarantees and subject to receipt of all required regulatory approvals, the company will issue 1.9 million common shares to Nemesia, subject to receipt of Toronto Stock Exchange approval, and a further 7,500 common shares per $500,000 drawn, calculated monthly, should any amount be drawn under the shareholder guarantees, subject to TSX and other regulatory approvals.

Nemesia is an insider of the company, and the shareholder guarantees and corresponding issuance of the Nemesia consideration are considered a related-party transaction pursuant to Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). All of the company's board of directors and all of the company's independent directors (as determined in accordance with Part 7 of MI 61-101) have unanimously determined that the transaction is advisable and in the best interests of the company, and that the transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to the financial hardship exemptions provided, respectively, under Section 5.5(g) and 5.7(1)(e) of MI 61-101.

A material change report in respect of the signing of the loan documentation in relation to the amended facilities, including the provision of the shareholder guarantees, will be filed in accordance with MI 61-101, but is not expected to be filed 21 days in advance of the closing of the facilities as the company wanted to close the facilities on an expedited basis for sound business reasons.

Norton Rose Fulbright acted as legal counsel to the company with support from Lawrence Khupe Attorneys in Botswana. Mayer Brown LLP acted as legal counsel for the MLAs with support from the Botswanan law firm Armstrongs.

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 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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