Exploration

Q2 2018 Exploration Update

MINERAL RESOURCE UPDATE AND BOTSWANA EXPLORATION 

Karowe Resource (AK06 kimberlite) Update 

During Q2, an updated mineral resource was announced for the AK06 kimberlite. The updated Mineral Resource Estimate was completed by Mineral Services Canada Inc. The estimate is based on historical evaluation data combined with new sampling results (microdiamond, bulk density and petrography) from recent deep core drilling and from historical drill cores. New delineation drill coverage and review of historical drill cores supported an update of the internal geological model. Production data (including a controlled production run from the EM/PK(S) unit) and recent sales / valuation results have been incorporated into the grade and value estimates, which have been made based on an updated model of process plant recovery efficiency. The updated Mineral Resource is reported based on the Canadian Institute of Mining Definition Standards for Mineral Resources and Reserves as incorporated by National Instrument 43-101 Standards of Disclosure for Mineral Projects.

The updated Mineral Resource, valid at the cut-off date of December 26, 2017, includes a recoverable Indicated Mineral Resource at a 1.25 mm bottom cut off size of 7.9 million carats hosted in 57.85 million tonnes at an average grade of 13.7 cpht with an average modeled diamond value of US$ 673 per carat. The new base of the Indicated Mineral Resource is 400 metres above sea level (“masl”) (600 metres below surface). The updated Mineral Resource also includes a recoverable Inferred Mineral Resource of approximately 1.17 million carats hosted in 5.84 million tonnes at an average grade of 20 cpht with an average modeled diamond value of US$716 per carat between 400 masl to 256 masl (base of current geological model).

These new results will be used for mine planning and to support the preparation of current feasibility-level studies for the potential development of an underground mine, after the completion of the current open pit mine.

Botswana Prospecting Licenses:

In 2014, the Company was awarded two precious stone prospecting licenses (PL367/2014 and PL371/2014). The prospecting licenses are located within a distance of 15 km and 30 km from the Karowe Diamond mine. The BK02 license was extended to Q3 2018 and the AK11/24 license was reduced by 50% in area and extended for two periods until the third quarter of 2019.

AK11 & AK24

For AK11, during the second quarter, the Company continued to process the large diameter drilling sample (estimated in-situ tonnage of 490 tonnes) at the Company’s Bulk Sample Plant located at the Karowe Mine. Due to maintenance issues with the Bulk Sample Plant, results are expected in Q3 2018. At AK24, a four holes core drilling programme was competed at AK24 for a total of 659 metres of drilling. Kimberlite was intersected in each hole, detailed logging and sampling for microdiamonds is underway. Microdiamond results are expected in early Q4 2018.

Sunbird Exploration Generative Project: 

During Q2 2018, an agreement was signed with a Botswana company to focus on new kimberlite discoveries within Botswana using a proprietary UAV magnetometer platform to identify potential targets. Data acquisition commenced during the three months ended June 30, 2018 and will continue for the remainder of the year, with drilling planned for late in Q3 2018. This work is being funded from the original exploration budget of $6.0 million for fiscal 2018.

Q1 2018 Exploration Update

EXPLORATION AND RESOURCE UPGRADE

Karowe Resource (AK06 kimberlite) Upgrade Drilling

During Q1, work continued on the resource model update with receipt of all microdiamond and density data from previous sampling. Work progressed on the updated geological and resource model for AK6, which is designed to increase confidence in the geological model for the South lobe of the AK06 kimberlite and provide sufficient data and material for an updated resource to be utilized in the underground project study for the Karowe mine. Mineral Services Canada has been contracted to assist in the development of a sampling program and the internal geology updates. Updates to the geological model, based on the 2016 and 2017 drilling programs, interpret a larger volume of the Eastern magmatic/pyroclastic kimberlite (“EM/PK(S)”) unit at depth than in the original model. The EM/PK(S) unit has recently (Q1 2018) been exposed in the Karowe open pit and during Q1, a controlled sample of EM/PK(S) of approximately 88,000 tonnes was processed through the Karowe process plant.From this sample, a total of 14,310 carats were recovered, including seven diamonds greater than 50 carats and one diamond greater than 100 carats. Results of this sample including independent and internal valuations will be used in the current resource model update, which is expected to be announced in Q2.

Botswana Prospecting Licenses:

In 2014, the Company was awarded two precious stone prospecting licenses (PL367/2014 and PL371/2014). The prospecting licenses are located within a distance of 15 km and 30 km from the Karowe Diamond mine. The BK02 license was extended for one period to the third quarter of 2018 and the AK11/24 license was reduced by 50% in area and extended for two periods until the third quarter of 2019.

AK11

During the first quarter, the Company continued to process the large diameter drilling sample (estimated in-situ tonnage of 490 tonnes) at the Company’s Bulk Sample Plant located at the Karowe Mine. Results are expected in the second quarter this year.

AK13

During the third quarter of 2017, the Company completed logging and sampling of AK13 and microdiamond samples were shipped for analysis. Microdiamond results were received in the first quarter of this year.As the samples were barren, no further work will be conducted on AK13.

AK24

During the first quarter this year, tenders were extended for a drill program at AK24 with the objective of commencing this program in the second quarter.

Q4 2017 Exploration Update

EXPLORATION AND RESOURCE UPGRADE

Karowe Resource (AK06 kimberlite) Upgrade Drilling

Work progressed on the updated geological and resource model for AK6, this program is designed to increase confidence in the geological model for the south lobe of the AK06 kimberlite and provide sufficient data and material for an updated resource to be utilized in the underground project study for the Karowe mine. Updates to the geological model interpret a larger volume of the Eastern magmatic/pyroclastic kimberlite (“EM/PK(S)”) unit at depth. A controlled sample of the EM/PK(S) unit will be mined and processed through the Karowe process plant to increase data available for size frequency and diamond value analysis. A similar program was conducted in 2013 for the magmatic/pyroclastic kimberlite (“M/PK(S)”) unit in support of the 2013 resource update.

Botswana Prospecting Licenses: 

In 2014, the Company was awarded two precious stone prospecting licenses (PL367/2014 and PL371/2014). The prospecting licenses are located within a distance of 15 km and 30 km from the Karowe Diamond mine. The BK02 license was extended for one year to Q3 2018 and the AK11/13/24 license was reduced by 50% in area and extended for two years until Q3 2019.

AK11

During Q4 2017, the Company completed a LDD program at AK11. A total of 1510 metres were drilled in 8 LDD holes with an estimated in-situ tonnage of 490 tonnes. Material recovered from the LDD samples commenced processing at the Company’s Bulk Sample Plant located at the Karowe Mine in Q4 2017, results are expected in early Q2 2018.

AK13

During Q3 2017 logging and sampling of AK13 was completed and microdiamond samples shipped for analysis. Microdiamond results are expected in Q1 2018 and followed by a drill program contingent on the results.

AK24

During Q4 2017, a limited drone-based geophysical survey was flown over AK24 to confirm location and nature of the anomaly. A drill program at AK24 is planned for Q1 2018.

Q3 2017 Exploration Update

EXPLORATION AND RESOURCE UPGRADE

Karowe Resource (AK06 kimberlite) Upgrade Drilling

During the quarter specific sampling of drill core was completed for density, petrography, and microdiamond analysis. Limited additional infill sampling was initiated in early Q4 to compliment the existing data and provide additional data points at depth. Drilling was completed in Q1 2017 on a planned 10,000 metre drill program at the Karowe Mine to test the AK06 kimberlite at depth. A total of 12 drill holes (9,750 metres) were completed with approximately 2,770 linear metres within the south lobe of the AK06 kimberlite being drilled. The program is designed to increase confidence in the geological model for the south lobe of the AK06 kimberlite and provide sufficient data and material for an updated resource to be utilized in an underground option study for the Karowe mine. Mineral Services Canada has been contracted to assist in the development of the sampling program and internal geology updates that will be utilized for an updated resource estimate for the current inferred portion of the Karowe Mine and is expected to be completed in Q4 2017.

Botswana Prospecting Licenses 

In 2014, the Company was awarded two precious stone prospecting licenses (PL367/2014 and PL371/2014) which are known to host kimberlites, BK02, AK11 and AK12, AK13 and AK14. The prospecting licenses are located within a distance of 15 km and 30 km from the Karowe Diamond mine. Extension applications were received from the Ministry of Mines in Q4 for prospecting licenses (“PL”) (PL367/2014 and PL371/2014).

AK11 

During Q3 2017, the Company completed all pilot holes and three of the planned eight large diameter drilling (“LDD”) holes at the AK11 kimberlite. Material recovered from the LDD samples commenced processing at the Company’s Bulk Sample Plant located at the Karowe Mine in early Q4 2017.

AK13

During Q3 2017 logging and sampling of AK13 was completed and microdiamond samples shipped for analysis. Results are expected during Q4 2017.

Q2 2017 Exploration Update

EXPLORATION AND RESOURCE UPGRADE

Karowe Resource Upgrade

During Q2 2017 specific sampling of drill core was initiated for density, petrography, and microdiamond analysis. Drilling was completed in Q1 2017 on a planned 10,000 metre drill program at the Karowe Mine to test the AK06 kimberlite at depth. A total of 12 drill holes (9,750 metres) were completed with approximately 2,770 linear metres within the south lobe of the AK6 kimberlite being drilled. The program is designed to increase confidence in the geological model for the south lobe of the AK06 kimberlite and provide sufficient data and material for an updated resource to be utilized in an underground option study for the Karowe mine. Core logging is complete and a program of core sampling for density, petrography, and microdiamond analysis is underway. Mineral Services Canada has been contracted to assist in the development of the sampling program and internal geology updates that will be utilized for an updated resource estimate for the current inferred portion of the Karowe Mine and is expected to be completed in Q4 2017.

Botswana Prospecting Licenses: 

In 2014, the Company was awarded two precious stone prospecting licenses (PL367/2014 and PL371/2014) that are known to host kimberlites, BK02, AK11 and AK12, AK13 and AK14. The prospecting licenses are located within a distance of 15 km and 30 km from the Karowe mine. Extension applications were submitted for each of the prospecting licenses (“PL”) (PL367/2014 and PL371/2014), responses from the Ministry of Mines are expected in Q3 2017.

AK11
During Q2 2017, the Company initiated large diameter drilling (“LDD”) sampling program at the AK11 kimberlite. Drilling has commenced on the pilot drill-hole aspect of the program. Material recovered from the LDD samples will be processed at the Company’s Bulk Sample Plant located at the Karowe Mine.

AK13
During Q2 2017 logging and sampling of AK13 was completed and microdiamond samples shipped for analysis. Results are expected during H2 2017.

Q1 2017 Exploration Update

EXPLORATION AND RESOURCE UPGRADE

Karowe Resource Upgrade 

During Q1 2017 the final drilling was completed on a planned 10,000 metre program at the Karowe Mine to test the AK06 kimberlite. A total of 12 drill holes (9,750 metres) were completed with approximately 2,770 linear metres within the South Lobe of the AK6 kimberlite being drilled. The program is designed to increase confidence in the geological model for the South Lobe of the AK06 kimberlite and provide sufficient data and material for an updated resource to be utilised in an underground option study for the Karowe mine. Core logging is complete and a program of core sampling for density, petrography, and microdiamond analysis is underway. Mineral Services Canada has been contracted to assist in the development of the sampling program and internal geology updates that will be utilised for an updated resource estimate for the current inferred portion of the Karowe Mine and is expected to be completed in Q4 2017.

Botswana Prospecting Licenses: 

In 2014, the Company was awarded two precious stone prospecting licenses (PL367/2014 and PL371/2014) which are known to host kimberlites, BK02, AK11 and AK12, AK13 and AK14. The prospecting licenses are located within a distance of 15 km and 30 km from the Karowe mine.

BK02

A total of 17 drill holes totaling 1,990 metres were drilled during Q4 2016 and Q1 2017, with microdiamond sampling completed in Q2, 2017. In Q2 2017, an independent valuation of the combined diamond parcel was under taken in Antwerp. The observed average price per carat for the combined parcel of US$56.76 per carat combined with the recovered sample grade, preclude additional drilling and sampling of the BK02 kimberlite. Based on the valuation and grade information no further work is planned at this time.

AK11 

During Q3 2016 a drill program was initiated and completed at AK11 with a total of ten core holes (1,570 metres of drilling), with nine of the holes intersecting kimberlite and the tenth hole which did not intersect kimberlite tested a geophysical anomaly to the west of AK11. Drilling confirmed the size of AK11 at approximately 2.5 hectares. Logging and sampling of the drill core is complete and microdiamond samples are currently being processed and are forecast to be complete during Q2 2017. Pending results a large diameter drilling program may be conducted at AK11.

AK13

During Q1 2017, a drill program was completed at AK13. A total of six holes (756 metres drilling) were tested with a 150 metre strike length of a vertical kimberlite dyke system, five holes intersected kimberlite and within the five holes, three holes intersected wider intercepts of kimberlite. An additional three holes tested geophysical anomalies adjacent to AK13 with no kimberlite being intersected. Microdiamond samples will be submitted during Q2 2017.

AK14

During Q1 2017, a three hole, 327 metres drill program was conducted at AK14. Based on the drilling information, no further work is planned at AK14.

Q4 2016 Exploration Update

EXPLORATION AND MOTHAE

Karowe Resource Upgrade Drilling

Drilling commenced on the planned 10,000 metre deep drill programme designed to test the Karowe AK06 kimberlite at depths below 400m with the objective of converting inferred mineral resources into the indicated category in support of underground mining studies. The drilling component of the program is expected to be completed in February 2017.

Botswana Prospecting Licenses: 

In 2014, the Company was awarded two precious stone prospecting licenses (PL367/2014 and PL371/2014) which are known to host kimberlites, BK02, AK11 and AK12, AK13 and AK14. The prospecting licenses are located within a distance of 15 km and 30 km from the Karowe mine. Ground geophysical surveys were conducted over the known kimberlite occurrences within the prospecting licenses during Q4 2014, Q1 2015 and Q2 2016. The geophysical results confirmed the kimberlite localities and have provided information that has been used to plan our core drilling and surface sampling programs.

BK02 

In Q2 2016, the company completed processing a bulk sample with a total of 274.33 carats being recovered from the processing of 5,916 tonnes, for a sample grade of 4.6 cpht. The largest diamond recovered was a 5.48 carat brownish octahedron. In addition, a total of 24 stones were recovered greater than 1 carat in weight, including 3 diamonds in excess of 2 carats in weight. In Q3 2016, the Company completed sampling of an additional 5,000 tonnes of kimberlite in order to recover a parcel of diamonds sufficient for basic valuation purposes. Processing of the second BK02 sample was completed in Q4 2016 with audit samples and diamond sorting forecast be complete in Q1 2017.

During Q4 2016, 14 drill holes totaling 1670 metres were drilled into the BK02 kimberlite. An additional three drill holes (320m) were completed in early Q1 2017. Drill core logging is underway and will be sampled for microdiamond analysis and is forecast to be complete in Q3 2017.

AK 11 

During Q3 a drill program was initiated and completed at AK11 with a total of ten core holes (1570 metres of drilling). This program constituted the first ever drilling on AK11. Nine holes were drilled at AK11 and all intersected kimberlite, the tenth hole which did not intersect kimberlite tested a geophysical anomaly to the west of AK11. Preliminary core logging indicates that AK11 has two distinct pipe infill sequences, a well preserved crater infill (graded bedding, re-sediment kimberlite) and a more magmatic/pyroclastic kimberlite phase. Drilling confirmed the size of AK11 at approximately 2.5 hectares. Logging and sampling of the drill core is underway, microdiamond samples are currently being processed and is forecast to be completed by Q2 2017.

Drilling will progress to AK13 and AK14 during Q1 2017.

Mothae Diamond Project, Lesotho

On March 31, 2016, the Company completed the transfer of its shares of Mothae Diamonds Pty Ltd and the Mothae site bulk sample plant to the Government of Lesotho. As consideration, the Government of Lesotho has released the Company from all liabilities relating to the rehabilitation of the Mothae Diamond Project. Lucara has no remaining ownership in this project.

Q3 2016 Exploration Update

Botswana Prospecting Licenses In 2014, the Company was awarded two precious stone prospecting licenses (PL367/2014 and PL371/2014) which are known to host kimberlites, BK02, AK11 and AK12, AK13 and AK14. The prospecting licenses are located within a distance of 15 km and 30 km from the Karowe Diamond mine. Ground geophysical surveys were conducted over the known kimberlite occurrences within the prospecting licenses during Q4 2014, Q1 2015 and Q2 2016. The geophysical results confirmed the kimberlite localities and have provided information that has been used to plan our core drilling and surface sampling programs.

At BK02 at the end of Q2 the company had completed a bulk sample with a total of 274.33 carats being recovered from the processing of 5,916 tonnes, for a sample grade of 4.6 cpht (carats per hundred tonne). The largest diamond recovered was a 5.48 carat brownish octahedron. In addition a total of 24 stones were recovered greater than 1 carat in weight, including 3 diamonds in excess of 2 carats in weight. In Q3 2016, the Company completed sampling of an additional 5000 tonnes of kimberlite from the BK02 kimberlite in order to recover a parcel of diamonds large enough for basic valuation purposes. Processing of the second BK02 sample was 28% complete at the end of Q3 2016.

During Q3 a drill programme was initiated and completed at AK11 with a total of 10 core holes (1570 metres of drilling). This programme constituted the first ever drilling on AK11. Nine holes were drilled at AK11 and all intersected kimberlite, the tenth hole which did not intersect kimberlite tested a geophysical anomaly to the west of AK11. Preliminary core logging indicates that AK11 has two distinct pipe infill sequences, a well preserved crater infill (graded bedding, re-sediment kimberlite) and a more magmatic/pyroclastic kimberlite phase. Drilling confirmed the size of AK11 at approximately 2.5 hectares. Logging and sampling of the drill core is underway and results will be released when the programme is complete. Drilling will progress to BK02, AK13, and AK14 during Q4 2016.

Karowe Resource Upgrade Drilling Drilling commenced on a planned 10,000 metre deep drill programme designed to test the AK06 kimberlite at depths below 400m with the a target to bring inferred mineral resources into the indicated category in support of underground mining studies. At the end of Q3 2016 the drilling component of the programme was 55% complete. The drilling portion of the programme will be complete by Q4 2016.

Q2 2016 Exploration Update

Botswana Prospecting Licenses

In 2014, the Company was awarded two precious stone prospecting licenses (PL367/2014 and PL371/2014) which are known to host kimberlites, BK02, AK11 and AK12, AK13 and AK14. The prospecting licenses are located within a distance of 15 km and 30 km from the Karowe Diamond mine. Ground geophysical surveys were conducted over the known kimberlite occurrences within the prospecting licenses during Q4 2014, Q1 2015 and Q2 2016. The geophysical results confirmed the kimberlite localities and have provided information that has been used to plan our core drilling and surface sampling programs. A drill programme will be initiated during Q3 2016 at BK02, AK11, AK13, and AK14.

In Q2 2016, the Company completed processing of the BK02 sample (see announcement dated June 13, 2016). The results of the BK02 bulk sample were press released on June 13, 2016. A total of 274.33 carats were recovered from the processing of 5,916 tonnes of BK02 material, for a sample grade of 4.6 cpht (carats per hundred tonne). The largest diamond recovered was a 5.48 carat brownish octahedron, in addition a total of 24 stones were recovered greater than 1 carat in weight, including 3 diamonds in excess of 2 carats in weight. Additional sampling will take place at BK02 and processing of the additional material from BK02 will start in mid Q3 2016.

Karowe Resource Upgrade Drilling

Drilling commenced on a planned 10,000 metre deep drill programme designed to test the AK06 kimberlite at depths below 400m with the a target to bring inferred mineral resources into the indicated category in support of underground mining studies. Drilling commenced in the latter stages of Q2 2016 and is ongoing with three core drilling rigs active.