Reserves and Resources

The 2024 Mineral Resource update, effective December 31, 2023, incorporates production and pit depletions since the 2019 Mineral Resource was completed. Average diamond value estimates are derived from historical sales and adjusted for changes to market conditions since the 2019 FS. The 2024 mineral resources for the Karowe Mine have been classified as either Indicated or Inferred Mineral Resources, according to CIM Guidelines. Mineral Resources reported are inclusive of those portions of the Mineral Resources that have been converted to Mineral Reserves. Mineral Resources reported are exclusive of stockpiles which are reported in the Mineral Reserve.

Mineral Resources

Notes:
1.        Prepared by Cliff Revering, P. Eng. of SRK Consulting (Canada) Inc.
2.        Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. All numbers have been rounded to reflect accuracy of estimate.
3.        Mineral Resources are in-situ Mineral Resources and are inclusive of in-situ Mineral Reserves.
4.        Mineral Resources are exclusive of all mine stockpile material.
5.        Mineral Resources are quoted above a +1.25 mm bottom cut-off and have been factored to account for diamond losses within the smaller sieve classes expected within the current configuration of the Karowe Mine process plant.
6.        Inferred Mineral Resources are estimated on the basis of limited geological evidence and sampling, sufficient to imply but not verify geological grade and continuity. They have a lower level of confidence than that applied to an Indicated Mineral Resource and cannot be directly converted into a Mineral Reserve.
7.        The base of the South Lobe Indicated Resource is 250masl, the base of the Inferred Mineral Resource is 66masl for the South Lobe. The base of the Centre and North Lobe Indicated Resource is 745masl.
8.        Average diamond value estimates are derived from historical sales and adjusted for current market conditions since completion of the 2019 FS and updated in 2023 and estimated future values.
9.        Mineral Resources have been estimated with no allowance for mining dilution and mining recovery.

A consolidated open pit and underground mine plan was developed to extract the economic portions of Karowe Mine Indicated Mineral Resources plus stockpiled ore. The mine plan includes extraction of three adjacent lobes of kimberlite. The South Lobe is planned to be mined through a combination of open pit and underground mining methods. The Centre Lobe is planned for extraction by open pit mining methods only. All Mineral Reserves are classified as Probable. The North Lobe mined from the open pit, is uneconomic and not considered a reserve.

The Qualified Persons preparing the Mineral Reserve Estimate was Brandon Chambers, P. Eng. The Qualified Persons did not identify any extraordinary risk, including legal, political or environmental risks that would materially affect potential Mineral Reserves development. The effective date of this Mineral Reserve Estimate is December 31, 2023.

Mineral Reserves

Notes:
1.        Prepared by Brandon Chambers, P.Eng. of JDS Energy & Mining Inc.
2.        CIM Guidelines and Definitions were followed for Mineral Reserves.
3.        Process recovery of the diamonds was assumed to be 100% as the recoveries were included in the mineral resource block model assumptions and therefore have taken recoveries into account.
4.        The bottom elevation of the Probable Reserve is 310 masl.
5.        Mineral Reserves are quoted above a +1.25 mm bottom cut-off and have been factored to account for diamond losses within the smaller sieve classes expected within the current configuration of the Karowe Mine Process Plant.
6.        Diamond price estimates are provided by Lucara; prices are derived from historical sales and adjusted for current market conditions.
7.        Tonnages are rounded to the nearest 100,000 tonnes, diamond grades are rounded to one decimal place to properly reflect the Reserve estimate accuracy.
8.        Tonnage and grade measurements are in metric units; contained diamonds are reported as thousands of carats.
9.        Open Pit Mineral Reserves are estimated at a cut-off value of US$37/t based on an OP mining cost of US$13/t, a processing cost of US$12/t and a G&A cost of US$12/t.
10.      Underground Mineral Reserves are estimated at a cut-off value of US$35/t based on an Underground mining cost of US$11/t, a processing cost of US$12/t and a G&A cost of US$12/t.
11.     Open Pit dilution assumptions have been revised in 2023 to account for dilution experienced in operations since 2022. Open Pit dilution included in the Reserve was estimated from the following source:
     -          2.0 m of zero-grade dilution from drill and blast activities along the kimberlite & host rock contact.
     -          A total OP dilution of 2.5%, or 0.1 Mt has been included in the Open Pit reserve estimate
12.     Underground dilution included in the in the 2019 FS were revised in 2021. Underground dilution included in the Reserve was estimated from the following three sources:
     -          1.0 m of zero-grade overbreak from stoping adjacent to the granite host rock;
     -          2.7 Mt of zero-grade overbreak from stoping adjacent to sedimentary rocks (based on geomechanical modelling);
     -          Inclusion of inferred KIMB3 kimberlite which for reporting and economic modelling purposes is treated as zero- grade dilution in the mine plan.
     -          A total Underground dilution of 9.6%, or 3.5 Mt has been included in the Underground reserve estimate.
13.      Stockpile Mineral Reserves are estimated at a cut-off value of US$19/t based on a rehandle cost of US$2/t, a processing cost of US$12/t and a G&A cost of US$5/t, when processed at the end of mine life.
14.     Stockpile Reserves are not included in the Karowe Mineral Resource Estimate, which covered only in-situ mineralized material.
15.     Stockpile Reserves are based on surveyed volumes and block model grades.
16.     Stockpile LOM diamond price is determined from the weighted average of the North, Centre, South - M/PK(s), and South - EM/PK(s) lobe ratios.

For additional details on the extent to which the Mineral Resources and Mineral Reserves may be materially affected by metallurgical, environmental, permitting, legal, title, taxation, socio-economic, marketing, political and other relevant issues, please see the section titled “Risks and Uncertainties” contained in the Company’s Annual Information Form, interim and annual audited consolidated financial statements and management's discussion and analysis of those statements, all of which are filed and available for review under the Company's profile on SEDAR at www.sedarplus.com.