Lucara draws down $10-million of standby undertaking

Executive Summary

• Lucara Diamond Corp. drew $10 million under a limited shareholder standby undertaking with its largest shareholder, Nemesia Sarl, to address a financing shortfall for the Karowe underground project.
• For each $500,000 drawn, Lucara will issue 7,500 common shares per month to Nemesia, settled quarterly, providing additional liquidity while preserving equity structure.
• The company reported two notable diamond recoveries from its 100 % owned Karowe mine: a 1,019.85‑carat non‑gem stone (the ninth >1,000‑carat diamond from Karowe) and a 37.42‑carat near‑gem pink Type 2a diamond, both sourced from EM/PK(S) material targeted by the underground project.

Key Details

• Standby Undertaking Structure
• Total standby commitment: $63 million (Nemesia).
• Component (i): $28 million to support liquidity shortfalls until UGP completion.
• Component (ii): $35 million financing‑shortfall guarantee for UGP completion.
• Draw Details
• Amount drawn: $10 million (out of the $28 million liquidity component).
• Share issuance rate: 7,500 common shares per $500,000 drawn each month; settlements occur quarterly.
• Purpose of Draw
• To address a financing shortfall for the Karowe underground project (UGP) and maintain financial flexibility during ongoing capital expenditures.
• Related‑Party Transaction
• Nemesia is an insider; the transaction was reviewed and approved by all board members and deemed exempt from formal valuation/minority approval under MI 61‑101 exemptions.
• Diamond Recoveries – August 2025
• 1,019.85‑carat non‑gem diamond recovered via Mega Diamond Recovery Unit – ninth >1,000‑carat stone from Karowe and third in 2025.
• 37.42‑carat near‑gem pink Type 2a diamond recovered from EM/PK(S) material (target feed for UGP).
• Operational Context
• Both stones were extracted from processing of EM/PK(S) material, which has historically yielded the world’s largest natural diamonds and is central to the underground project’s feedstock.
• Management Commentary
• CEO William Lamb emphasized that the draw reflects a prudent approach to liquidity management and underscores shareholder confidence in Lucara’s long‑term strategy and diamond value potential.

Notable Quotes

“The decision to draw $10.0 million from the standby undertaking provided by our largest shareholder represents a prudent approach to maintaining our financial flexibility during the current period of ongoing UGP capital expenditures. This funding mechanism demonstrates the continued confidence and unwavering support of our major shareholders in Lucara's long‑term strategy and the exceptional value potential, including the ongoing recovery of the world's most significant diamonds from our Karowe mine.” – William Lamb, President & CEO

Materiality Assessment: Material – Positive (the financing draw materially improves liquidity for a key development project, and the diamond recoveries highlight significant operational success).