Lucara closes $350-million (U.S.) bond offering

Executive Summary

• Lucara Diamond Corp. has closed a $350 million (U.S.) private placement of senior secured bonds with a five-year tenor and a 12.5% fixed annual coupon.
• Net proceeds were used to fully repay $220 million (U.S.) of existing senior secured project finance facilities, simplifying the company's capital structure.
• The remaining proceeds will fund a two-year debt service retention account and support the continued development of the Karowe underground project (UGP), with full-scale production targeted for the first half of 2028.

Key Details

• Financing Structure: $350 million (U.S.) senior secured bonds.
• Tenor: Five years.
• Interest Rate: Fixed coupon rate of 12.5% per annum, payable in quarterly instalments.
• Use of Proceeds:
  • Full repayment of $220 million (U.S.) existing senior secured project finance facilities.
  • Establishment of a dedicated debt service retention account covering two years of interest on the bonds.
  • Financing for the continued development of the Karowe underground project (UGP).
• Additional Capital Capacity: The financing includes an option to tap for a further $50 million (U.S.) and an option to add a $50 million (U.S.) revolving credit facility (RCF).
• Project Update (UGP):
  • The financing provides capital certainty to advance the UGP through to completion.
  • Underground development ore is scheduled to begin offsetting stockpiles in 2027.
  • Full-scale underground production is planned for the first half of 2028.
  • Development is based on an updated feasibility study prepared in accordance with National Instrument 43-101.

Notable Quotes

• William Lamb, President and CEO: "This financing marks a pivotal milestone for Lucara, significantly strengthening our balance sheet and providing the financial certainty required to advance the UGP through to completion. The successful placement of $350-million (U.S.) in senior secured bonds, alongside the full repayment of our existing project debt, simplifies our capital structure while enhancing our liquidity and financial flexibility. Importantly, the additional capacity through the tap option and potential RCF provides further strategic headroom as we execute on the next phase of underground development."