LUC – Lucara Diamond Becomes First Lundin Group Dividend Payer

POSTED ON February 24, 2014 BY Travis McPherson
CATEGORY Africa, Companies, Diamonds, Lucara Diamond, Lukas Lundin,

Lucara Diamond (LUC:TSX), announced this morning that its Board has approved a $0.02 per share semi-annual cash dividend. This move is the first for the Lundin Group of Companies and highlights the stability of the Karowe mine's diamond production. The $0.02 dividend is to be declared in May with payment in June. The Board also approved the possibility of a special dividend based on revenues generated from exceptional stone tenders.

Given the performances of their tenders to-date, this is a very real possibility, and one that shareholders should look forward to. Becoming a dividend payer will open the Lucara story up to a whole other group of investors. One of the largest segments of the market; the yield investor.

William Lamb, President and CEO, commented: "The intention of the board to declare a maiden dividend payment is a significant step forward for Lucara. The adoption of a dividend policy demonstrates our confidence in our business, recognizes the quality and cash flow generation of the company's asset and our commitment to our shareholders. With Karowe's operational performance and cash flow generation ability we believe that Lucara is well positioned to provide a return to our shareholders while continuing to seek growth opportunities."

Lucara's Karowe mine produces some the highest quality stones and demands premium prices (Image: Lucara Diamond Corp.)

As part of the release this morning, Lucara announced their first exceptional stone tender of 2014. This will be comprised of 20 individual diamonds with a combined weight of 1,191.71 carats. This tender is expected to close April 10, 2014. The largest stone in this tender is 167.08 carats and the smallest is 16.32 carats.

Lucara's last tender of 14 stones, totaling 1,128 carats were sold at an average of $20,280 per carat bringing in $22.9 million. At that per carat price, this first tender of 2014 could bring in nearly $25 million.

The company is in the construction stages of its expansion to the processing facilities at Karowe. Given the frequency of such large, exceptional quality diamonds that were unanticipated during the original design, the company has decided to spend up to $50 million to improve the recoveries of these large stones.

The initial process plant design at Karowe did not specifically allow for the effective recovery of these stones. The company was able to make temporary modifications, but is now underway with a permanent solution which should allow for the better recovery of large stones. This is expected to be completed by year-end.

Lucara is guiding production of between 400-420,000 carats this year at an average all-in cash cost of between $31-$33 per tonne.

Read: Lucara Announces Dividend Policy and Exceptional Stone Tender

Travis McPherson

trav@ceo.ca

Travis McPherson

trav@ceo.ca

Disclaimer:

Readers are advised that the material contained herein is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities. The information contained herein is based on sources which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available data. Any opinions expressed are subject to change without notice. The owner, editor, writer and publisher and their associates are not responsible for errors or omissions. They may from time to time have a position in the securities of the companies mentioned herein, and may change their positions without notice. (Any significant positions will be disclosed explicitly. This article is not intended to meet your specific individual investment needs and it is not tailored to your personal financial situation. Nothing contained herein constitutes, is intended, or deemed to be — either implied or otherwise — investment advice. Thomas Humphreys, Pacific Website Company Inc., and other entities in which he has an interest, employees, officers, family, and associates may from time to time have positions in the securities or commodities covered in these publications or web site. We reserve the right to buy and sell such securities or commodities without notice to readers. While the information herein is believed to be accurate and reliable it is not guaranteed or implied to be so. The information herein may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. Neither Thomas Humphreys, nor anyone else, accepts any responsibility, or assumes any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information in these publications or web site.

Forward-Looking Statements: This article may include certain "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "forecast", "expect", "potential", "project", "target", "schedule", budget" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the potential of the Company's properties are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Company's expectations include actual exploration results, changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and other exploration or other risks detailed herein and from time to time in the filings made by the Company with securities regulators. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward-looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date of this article. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Always do your own due diligence. We seek safe harbor.