Reserves & Resources

Mineral Resources

An updated Mineral Resource Estimate was completed by Mineral Services Canada Inc. and published by Lucara on June 26th, 2018. 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 (Table 1a), valid at the cut-off date of 26 December 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 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). The updated recoverable Indicated Mineral Resource for the South Lobe is presented in Table 1b, valid at a cut off date of 26 December 2017.

Table 1a: Statement of Remaining Mineral Resources in the AK06 kimberlite

The reported resources are those remaining (including stockpile material) as of 26 December 2017.

Table 1b: Statement of Remaining Indicated Mineral Resources in the South Lobe: AK06 kimberlite

1. m3 = million cubic metres, 2. tpm3 = tonnes per cubic metre, 3. Mt = million tonnes, 4. Mct = million carats, 5.cpht = recoverable (+1.25 mm) carats per hundred tonne, 6. $/ct = recoverable (+1.25 mm) United States dollars per carat. Tonnage, grade and value estimates are based on updated Mineral Resource Estimate prepared by MSC under the supervision of Dr. Tom Nowicki of Mineral Services Canada Inc. a “Qualified Person” within the meaning of NI 43-101 and independent of Lucara. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The AK06 mining licence (ML2008/6L) expires in May 2023. The mining licence will have to be renewed for the underground development at AK06 to progress.

Mineral Reserves

Mineral Reserve Estimate for the open pit portion of the Karowe Mine has been updated based on the updated Indicated Mineral Resource Estimate. Inferred Resources have not been used to estimate Mineral Reserves. The Resource to Reserve conversion was performed by Lucara by conducting an open pit optimisation using Whittle® suite software. The outputs of this process include a mining schedule on which to base plant capacity, waste rock quantities, peak capacities and mining fleet parameters. It should be noted that the Whittle® optimisation is ongoing and is being considered within the feasibility study of the Karowe Underground Project.

The Mineral Reserve Estimate has been classified and reported in accordance with the Canadian National

Instrument 43‐101, ‘Standards of Disclosure for Mineral projects’ of June 2011 (the Instrument), updated in 2015 and the classifications adopted by the CIM Council in November 2011.

The effective date of the Mineral Reserve Estimate is May 2018.

The Mineral Reserves (Table 1‐3) were derived from the Mineral Resource block model. The Mineral Reserves are the Indicated Mineral Resources that have been identified as being economically extractable through the current open pit mining approach, incorporating mining losses and the addition of waste dilution. The Mineral Reserves form the basis for the open pit mine plan and incorporate stockpiled kimberlite.

Table 1-3: Mineral Reserve Statement for the Karowe Mine

Open Pit Mineral Reserve Estimate for the Karowe Diamond Mine, Botswana, as at May 2018
Lobe Reserve
Category
Tonnes

(Mt)
Recoverable
Grade13

(cpht)
Recoverable
Carats

(Mcts)
Diamond
Revenue6

(US$/ct)
Unit
Revenue

(US$/t)
North Probable 1.04 13.37 0.14 222 29.68
Centre Probable 3.37 14.57 0.49 367 53.46
South Probable 15.43 12.74 1.97 716 91.22
In-situ Reserve (OP Material)14 19.84 13.08 2.60 624 81.58
Working Stockpiles11 Probable 2.10 9.96 0.21 661 65.83
LOM Stockpiles12 Probable 3.46 4.57 0.16 609 27.84
Total Reserve15,16   25.40 11.66 2.96 625 72.95

Notes:

  1. The Mineral Reserve has been depleted for mining up to May 2018
  2. Figures have been rounded to the appropriate level of precision for reporting
  3. Due to rounding, some columns or rows may not compute exactly as shown
  4. The Mineral Reserves are stated as in-situ dry metric tonnes
  5. The Mineral Reserves were prepared under the guidelines of the CIM, for reporting under NI 43-101
  6. Diamond price is based on diamonds recoverable with current Karowe plant process and Lucara Diamond Price Book
  7. Modifying factors for mining recovery of 97 % and waste dilution of 3 % at 0.0 cpht have been applied
  8. Probable Mineral Reserves were derived from Indicated Mineral Resources
  9. Mineral Reserves are inclusive of Mineral Resources
  10. There are no known legal, political, environmental, or other risks that could materially affect the potential Mineral Reserves
  11. Working stockpiles comprise surface loose stocks of material with estimated grades exceeding 7 cpht; includes High Grade (HG), Medium Grade (MG), Low Grade (LG) and Contact kimberlite
  12. Includes existing LOM Stockpiles of Very Low Grade (VLG) kimberlite material (< 7cpht) as well as in-situ VLG material (currently part of in-situ resource) expected to be directed to the LOM stockpile (1.0Mt @ 6.24 cpht in-situ and 2.5Mt @ 3.9 cpht current surface stocks @ average value of US$ 609/ct). LOM Stockpiles will be processed at the end of life of open pit mining
  13. Based on the updated Mineral Resource estimate as presented in this report (1.25 mm bottom cut off size - BCOS) – 70 % of in‑situ carats at 1.00 mm BCOS
  14. Exclusive of current stockpiles and VLG in-situ material (see note 12 above)
  15. Inclusive of current stockpiles and VLG in-situ material (see note 12 above)
  16. The Mineral Reserves reported in this table are attributable solely to the ore to be mined (and processed or stockpiled for later processing) from the open pit mine at Karowe