Ms. Eira Thomas reports

LUCARA'S DECEMBER DIAMOND TENDER EXCEEDS EXPECTATIONS

Lucara Diamond Corp.'s final diamond tender of 2019, held on Dec. 12, generated sales proceeds of $52.9-million (U.S.), 16 per cent higher than expected, and achieved an average price of $548 (U.S.) per carat. Market pricing improvements were noted in all size classes. The December tender puts Lucara's 2019 revenue at $192.5-million, exceeding the 2019 revenue guidance of $170-million to $180-million.

2019 sales highlights:

• Total proceeds of $192.5-million (U.S.) (including Clara);
• Average price of $468 (U.S.) per carat;
• 30 diamonds sold for greater than $1-million each.

Clara has also continued to make excellent progress in 2019, completing 16 sales and growing its customer base well beyond expectations from four to 27 clients. Further, demand in recent sales has now outstripped available supply, and the platform is ready to receive a larger quantity of third party goods to support its next phase of growth. Trials with at least two other providers are anticipated beginning in early 2020. Clara is achieving strong prices for Karowe diamonds and generating attractive margins for its customers, confirming that significant value can be unlocked by selling rough diamonds in a more efficient way, using technology and based on specific demand for individual polished products.

The positive results of the Karowe Underground feasibility study announced on Nov. 4, 2019, have been summarized in a technical report prepared pursuant to the guidelines of National Instrument 43-101 and filed on SEDAR Dec. 17, 2019. The report is also available on Lucara's website (PDF). A budget of up to $53-million (U.S.) has been approved for early works related to the proposed underground mine at Karowe. An investment decision, subject to receipt of all required authorizations and the arrangement of financing, is expected in second half 2020. The approved budget is based on the company's ability to finance these initial capital expenditures from operating cash flow in 2020. The early works program will include detailed engineering, procurement, earth works, and presinking of production and ventilation shafts to mitigate key risks related to the schedule.

Eira Thomas, chief executive officer, commented: "Though it is too early to call a trend, prices achieved in our final sale of the year reflect a stronger, more stabilized market environment and continued strong demand for Karowe diamonds. As a result, we have exceeded our revenue guidance for 2019. Lucara's continued focus on operational excellence underpins this strong performance, delivering strong margins despite the weaker pricing environment. The company remains well positioned and highly levered towards further strengthening in diamond prices over the next 12 to 24 months as supply constraints from large, maturing mines begin to manifest. This bodes well not only for our current open pit operations, but also supports our plans for underground expansion to extend Karowe's mine life to at least 2040, with the potential to generate an additional $4-billion (U.S.) in revenue." She further added: "Our strong performance at the mine, combined with the delivery of a robust underground feasibility study, is supplemented by encouraging early results from Clara. Two thousand nineteen marked the first of a two-year ramp-up period for our secure digital sales platform, and we are pleased to report that our customer base has grown beyond expectations. We remain on track to deliver strong cash flows consistent with our five-year plan."

About Lucara Diamond Corp.

Lucara is a leading independent producer of large exceptional-quality Type IIa diamonds from its 100-per-cent-owned Karowe mine in Botswana. The company has an experienced board and management team with extensive diamond development and operations expertise. The company operates transparently, and in accordance with international best practices in the areas of sustainability, health and safety, environment, and community relations.

We seek Safe Harbor.