LUCARA PROVIDES UPDATE ON PREVIOUSLY ANNOUNCED PRIVATE PLACEMENT

Executive Summary

• Lucara Diamond Corp. announced a non‑brokered private placement of 1,031,250,000 common shares at $0.16 per share, targeting gross proceeds of C$165 million to address a liquidity shortfall and fund continued development of the Karowe underground project (UGP).
• The company has applied to the Toronto Stock Exchange for a “financial hardship” exemption from shareholder‑approval requirements due to its serious financial difficulty and the large insider participation in the placement.
• Closing is expected in late January 2026, subject to regulatory approvals; proceeds will be used for UGP shaft equipping, conveyance commissioning, lateral development, equipment purchases, working capital, and general corporate purposes.

Key Details

• Placement Size: 1,031,250,000 common shares
• Price per Share: C$0.16 (≈23.6 % discount to VWAP for the five days ending Jan 9, 2026; ≈22.4 % discount to VWAP for the five days ending Jan 14, 2026)
• Gross Proceeds Target: C$165.0 million
• Finder’s Fee: Up to 5 % may be paid (excluding Lundin Family Trust participation)
• Use of Proceeds:
• Liquidity shortfall remediation
• Advancement of UGP shaft equipping, conveyance commissioning, lateral development, extraction and drill‑horizon development
• General working capital and corporate purposes
• Closing Timeline: Expected late January 2026 (date may be adjusted)
• Hold Period: Canadian statutory four‑month hold on issued shares
• Insider Participation: Lundin Family Trusts to subscribe for C$54.04 million (~56.5 % of market cap), representing 73.86 % of current outstanding shares; post‑closing they would own ~30.8 % of shares.
• TSX Exemption Request: Application under Section 604(e) for a financial‑hardship exemption to bypass mandatory shareholder approval thresholds (10 % insider consideration, >25 % new issuances).
• Special Committee Review: Independent directors unanimously recommended the exemption application after assessing the company’s dire cash position and lack of alternative financing.
• Financial Context:
• UGP feasibility study (Jan 5, 2026) estimates total project cost US$779.2 million.
• Company has fully drawn its US$190 million Project Facility, US$30 million Working Capital Facility, and US$28 million Shareholder Standby Undertaking; all facilities are now exhausted.
• Recent covenant breaches led to defaults on the Project Facility; lenders waived defaults on Dec 30, 2025, but future liquidity shortfalls could trigger further defaults.
• Potential Outcomes: TSX may place the shares under delisting review; failure to obtain exemption could force a move to the TSX Venture Exchange.

Notable Quotes

“Lucara's board and management remain fully committed to protecting long‑term shareholder value while advancing the UGP… The application for the financial hardship exemption is a prudent and temporary step that provides the Company with added flexibility as we complete this capital‑intensive phase of development.” – William Lamb, President & CEO