ALLUVIAL DIAMOND MINING

Lucapa and its Angolan partners Endiama and Rosas & Petalas commenced commercial alluvial diamond mining operations at Lulo in January 2015, with mining company Sociedade Mineira Do Lulo (SML) (Lucapa 40% owner and operator) formally incorporated in May 2016.

To date, Lulo has achieved gross revenues of ~US$150 million at an average sale price of ~US$2,000 per carat. This has established Lulo among the world’s highest US$ per carat alluvial diamond production.

Lulo is a prolific producer of large and premium value diamonds, including regular recoveries of Specials (large diamonds weighing more than 10.8 carats). These Specials include 13 +100 carat stones, including Angola’s two largest recorded diamonds weighing 404 carats (named the 4th February Stone) and 227 carats.

Lulo is also a source of coloured diamonds, with production including +40 carat pinks and yellows.

The 1.1 Mtpa Lulo diamond plant includes XRT large-diamond recovery technology capable of recovering individual diamonds of up to 1,100 carats.

Alluvial mining and exploration activities at Lulo have until recently been focused primarily on the terrace deposits along a ~50km stretch of the Cacuilo River running through the ~3,000km2 concession, much of which remains untested.

However, through ongoing exploration programs, the Lulo partners recently discovered that in addition to the terraces, the previously-untested flood plains (leziria areas) along the Cacuilo River also host large and premium-quality diamonds.

These flood plains are extensive, highlighting the potential for a significant expansion of diamond resources and mine life at Lulo.

In March 2019, Lucapa announced un updated JORC classified inferred alluvial diamond resource for Lulo which included a 90% increase in in-situ resource carats, equivalent to more than four times SML’s 2018 production.