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2016-02-24

LUCARA REPORTS STRONG OPERATIONAL RESULTS IN A YEAR OF HISTORIC DIAMOND RECOVERIES

Lucara Diamond Corp
Financial Statement Release

LUCARA REPORTS STRONG OPERATIONAL RESULTS IN A YEAR OF HISTORIC DIAMOND
RECOVERIES

February 23, 2016 (LUC ? TSX, LUC ? BSE, LUC ? Nasdaq Stockholm) Lucara Diamond
Corp. (?Lucara? or the ?Company?) reports full year revenues of $224 million
for the year and cash of $134.5 million. All figures are in U.S. dollars
except for the dividend.

HIGHLIGHTS:

-- The recovery of the Lesedi La Rona in November 2015, the first diamond over
1,000 carats to be recovered in more than 100 years and the largest ever
from a Botswana operation.

-- The Company is very pleased to be provided with the opportunity to soon
showcase the historic Lesedi La Rona to the President of Botswana and his
cabinet.

Financial:

-- EBITDA for the period year was $134 million (2014: $173.4 million), with an
EBITDA margin of 60%. Return on equity was 30%.

-- Net cash position $134.5 million (2014: $100.8 million).

-- Year to date costs at $29 per tonne ore processed were well controlled and
were below forecast.

-- Plant optimization, bulk sample plant project and sustaining capital costs
were all within forecast.

-- Full year earnings per share were $0.21 per share (2014: $0.13 per share).

-- 2015 year end diamond inventory includes over 60,000 carats. The Company?s
first exceptional stone tender is closing on April 13, 2016, which excludes
the three large stones recovered and announced in November 2015.

Operational: Karowe Mine

-- Recovery of the Lesedi La Rona (1,109 carats) and the 813 carat stone. The
largest and second largest gem quality diamonds ever to be recovered in
Botswana.

-- The recovery of these stones demonstrates the capabilities of a newly
implemented large diamond XRT recovery circuit, a key deliverable of the
plant optimization project.

-- Mining of ore was in line with forecast and waste stripping to open the pit
at depth was ahead of schedule.

-- Exceptional recovery of large stones with a total of 47 stones greater than
100 carats (2014: 31 stones) including 20 stones greater than 200 carats
(2014: 4 stones) of which seven stones were greater than 300 carats.

Exploration:

-- Sampling progressed well with kimberlite processed from BK02. The BK02
diamond results will be released once processing of the sample is complete,
which is expected to be during the first half of 2016.

-- Bulk sampling activities at AK12 will commence in the first quarter of 2016
and will be followed by trenching at AK11 during Q2 2016.

William Lamb, President and Chief Executive Officer commented ?2015 was a year
of strong operational delivery with the timely completion of our plant
optimization project and large diamond recovery, culminating in the recovery of
the second and sixth largest gem quality diamonds ever to be unearthed. Our
continued focus on cost control and our disciplined deployment of capital has
resulted in the Company achieving a 30% return on equity and with our strong
cash generation has enabled the introduction of a progressive dividend for our
shareholders going forward.

In 2016 we are focused on completing the installation of our Mega Diamond
Recovery circuit as well as organic growth at Karowe through our deep drilling
and exploration programs in Botswana.

The diamond market experienced some weakening in 2015 and we retain a cautious
outlook on diamond prices for 2016. We believe the long term fundamentals for
the diamond market remain strong and with the outstanding quality of our Karowe
production, which will be increasingly from the high value south lobe, Lucara
is in an excellent position for continued financial growth and we remain
committed to achieving strong returns for our shareholders?.

FINANCIAL UPDATE

Revenues: During the year the Company had sales totaling 377,136 carats for
gross proceeds of $223.8 million at an average price of $593 per carat. The
Company continued to achieve strong prices for its exceptional stone sales
resulted in an average price of $31,597 per carat in 2015 for 3,114 carats sold
(2014: $32,471 per carat for 4,176 carats sold). The regular tenders achieved
an average price of $335 per carat, an increase of 5.3% compared to 2014 which
reflects the quality of the mine?s production and an increasing proportion of
south lobe material.

Cash flows and operating margins: EBITDA for 2015 was $133.9 million (2014:
$173.4 million). The decrease in operating margins was largely due to
reduction in carats sold in 2015. The Company?s focus on cost control, which
resulted in a cost per tonne treated of $28.9 (2015 guidance: $33-$36 per
tonne) contributed to the Company achieving an EBITDA margin of 60%.

Net cash position: The Company?s year-end net cash balance was $134.8 million
(2014: $100.8 million). The increase in the Company?s cash balance was due to
its strong operating cash flows, which financed the Company?s plant
optimization expenditure, stripping costs and its dividend payment to
shareholders of $11.8 million during the year. The Company paid $22.4 million
in royalties and $46.7 million in taxes to the Government of Botswana of which
$35.2 million was for 2015 taxes and the remainder largely for the final 2014
tax payment. The Company has a residual 2015 tax payable balance of $9.5
million, which is forecast to be paid during the first quarter of 2016. The
Company?s $50 million credit facility remains undrawn.

Earnings per share: Earnings per share was $0.21 per share for the year ended
December 31, 2015 (2014: earnings per share was $0.13) and $0.05 per share for
the quarter ended December 31, 2015 (2014: earnings per share was $0.04).

Dividends: The Company paid its semi-annual dividend of CDN 2 cents per share
on December 17, 2015 for a cumulative dividend of CDN 4 cents per share for the
year. The total dividend paid in 2015 by the Company was $11.8 million.

In 2016 the Company is introducing a progressive dividend with the aim to
maintain or increase the Canadian dollar dividends per share on an annual
basis. The dividends will be paid on a quarterly basis. The Company has
declared a first quarter dividend of CDN 1.5 cents per share. The dividend is
expected to be paid on March 31, 2016 to holders of securities on the record of
the Company?s common shares at the close of business on March 18, 2016. The
Company anticipates that it will declare a further three payments of CDN 1.5
cents per share in 2016 at the end of each quarter for a total yearly dividend
of CDN 6 cents per share however the declaration of all future dividends each
quarter remains in the discretion of the Board of Directors and is subject to
the requirements of the Company?s dividend policy.

FINANCIAL HIGHLIGHTS

Three months ended Year ended
December 31 December 31
In 2015 2014
2015 2014
milli
ons of
U.S.
dolla
rs
unles
s
other
wise
noted
--------------------------------------------------------------------------------
----------------------
--------------------------------------------------------------------------------
----------------------
Revenu $ 65.2 $ 70.5 $
223.8 $ 265.5
es (1)
Averag 693 675
593 644
e
price
per
carat
sold
($/ca
rat)
Operat 137 89
133 115
ing
expen
ses
per
carat
sold
($/ca
rat)
Operat 556 586
460 529
ing
margi
n per
carat
sold
($/ca
rat)
Net 19.0 (16.8)
77.8 45.7
incom
e
(loss
) for
the
perio
d(2)
Earnin 0.05 (0.04)
0.21 0.13
gs
(loss
) per
share
(basi
c)
Earnin 0.05 (0.04)
0.20 0.13
gs
(loss
) per
share
(dilu
ted)
Cash $ 134.8 $ 100.8 $
134.8 $ 100.8
on
hand
--------------------------------------------------------------------------------
----------------------

(1) Revenue is presented based on cash receipts received during the period and
excludes any tender proceeds received after each quarter end. See results of
operations for reconciliation of revenue and total proceeds for tenders
proceeds received after quarter end.

(2) Net loss in Q4 2014 was mainly generated by the Mothae impairment and
restoration charge: $21.2 million in the period.

RESULTS OF OPERATIONS

Karowe
Mine,
Botsw
ana
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
-
UNIT Year ended Q4-15 Q3-15 Q2-15 Q1-15 Q4-14
Dec-15
Sales
Revenu US$m 223.8 65.2 90.8 38.1 29.7
70.5
es
Procee US$m 223.8 65.2 89.2 39.7 29.7
70.5
ds
gener
ated
from
sales
tende
rs
condu
cted
in
the
quart
er are
compr
ised
of:
Sales US$m 223.8 65.2 90.8 38.1 29.7
70.5
proce
eds
recei
ved
durin
g the
quart
er
Q2 US$m - - (1.6) 1.6 -
-
2015
tende
r
proce
eds
recei
ved
post
Q2
2015
Carats Carats 377,136 94,026 76,156 100,177 106,777
104,405
sold
for
proce
eds
gener
ated
durin
g the
perio
d
Carats Carats 377,136 94,026 83,960 92,373 106,777
104,405
sold
for
reven
ues
recog
nized
durin
g the
perio
d
Averag US$ 593 693 1,171 396 278
675
e
price
per
carat
for
proce
eds
gener
ated
durin
g the
perio
d**
Averag US$ 593 693 1,081 412 278
675
e
price
per
carat
for
proce
eds
recei
ved
durin
g the
perio
d***
Produc
tion
Tonnes Tonnes 3,187,222 1,038,901 864,180 722,855 561,287
757,672
mined
(ore)
Tonnes Tonnes 13,890,115 3,143,168 3,224,971 4,278,605 3,243,372
2,477,687
mined
(wast
e)
Tonnes Tonnes 2,238,974 567,966 560,501 506,538 603,969
566,681
treat
ed
Averag cpht 16.3 15.6 18.0 16.9 14.9
20.1
e (*)
grade
proce
ssed
Carats Carats 365,690 89,247 100,651 85,714 90,077
113,950
recov
ered
Costs
Operat US$ 133 137 130 160 108
89
ing
costs
per
carat
s sold
Capita
l
expen
diture
s
(incl
uding
capit
alized
waste
)
Plant US$m 16.1 1.6 2.9 2.2 9.4
16.6
Optim
izatio
n
Sustai US$m 5.0 0.6 1.2 2.1 1.1
2.3
ning
capit
al
Bulk US$m 2.5 0.7 1.4 0.2 0.2
2.0
Sampl
e
Plant
Capita US$m 12.6 1.0 2.3 4.2 5.1
1.8
lized
waste
Total US$m 36.2 3.9 7.8 8.7 15.8
22.7
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
--
(*) carats per hundred tonnes(**) Average price per carat for proceeds
generate...

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