lucapa diamond company limited (asx: lom) · pdf filelucapa diamond company limited abn 44 111...

Lucapa Diamond Company Limited abn 44 111 501 663 | 34 Bagot Road | Subiaco 6008 | Western AustraliaPO Box 298 | West Perth WA 6872 | T +61 8 9489 9200 | F +61 8 9489 9201 | [email protected]

ASX Announcement 3 January 2014

32.2 CARAT TYPE 2A DIAMOND RECOVERED AT LULO

Lucapa Diamond Company Limited (ASX: LOM) is pleased to announce the recovery of a 32.2 caratType 2A diamond from its Lulo Concession in Angola.

The D colour, 32.2 carat, Type 2A diamond was recovered from the BLK_19 bulk sample adjacent to theBLK_06 site, approximately 1,600m south east of the priority Se251 kimberlite pipe (Figure 1).

The diamond measured 32x10x8mm and is the largest recovered by Lucapa through the new Dense MediaSeparation (DMS) plant which the Company commissioned in November 2013 and is the fourth largestdiamond recovered at Lulo to date.

32.2 carat Type 2A diamond from Lulo

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Lucapa Diamond Company Limited abn 44 111 501 663 Page | 2

The 32.2 carat Type 2A diamond has an irregular dodecahedral shape and is of exceptional colour and clarity.Colorimeter testing of the diamond not only demonstrated that the diamond is a Type 2A stone but also thatit would be considered of D colour. A D colour is given to only the finest white diamonds; these are totallycolourless and classified as “exceptional white” by CIBJO1. While the diamond appears flawless to Lucapastaff, this will need to be confirmed by independent examination.

Lucapa Managing Director Miles Kennedy said the latest Type 2A diamond recovery underlines the world-class exploration potential of the Lulo Concession and the benefits of the newly commissioned DMS plant.

“We are continuing to recover large, rare Type 2A diamonds from multiple and widespread pits within our3,000 square kilometre Lulo project and are confident of finding the kimberlite pipe or pipes, that are thesource of these magnificent diamonds” said Mr Kennedy.

32.2 carat Type 2A diamond from BLK_19

1Quality, colour and diamond type of larger diamonds are determined using a ZVI Yehuda F1000 Colorimeter. CIBJO, (ConfédérationInternational de la Bijouterie, Joaillerie, Orfèvrerie des Diamants, Perles et Pierres) the World Jewellery Confederation represents theinterests of all involved in jewellery, gemstones and precious metals, from mine to marketplace.

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32.2 carat Type 2A diamond from Lulo

Lucapa began processing the BLK_19 bulk sample to directly compare treatment results and metallurgicalparameters for gravel treated through the old and new DMS plants. The BLK_19 pit abuts and extends theBLK_06 pit and the gravels from the two samples were considered essentially identical in character.

Since the Company last reported the results from the BLK_18 bulk sample on 19 December 2013 an additional236 cubic metres of gravel has also been processed. To date, 735 cubic metres of sample processed fromBLK_18 has produced 43 diamonds weighing 25.35 carats. BLK_18 is located within the northern part of thepriority Se251 kimberlite pipe. The results from BLK_06, BLK_18 and BLK_19 to date are summarised inTable 1.

Over the coming month, the Company will treat alluvial gravels from BLK_18 and BLK_19 samples through thenew DMS plant. While conditions at Lulo are extremely wet due to the monsoon season, the Company alsohopes to recommence excavating sample from the priority Se251 kimberlite pipe during January.

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SampleNumber

GravelVolume

Size Distribution1 Numberof

Stones

Weight Ave.Size

Grade4 LargestStone

(m3) <1ct. 1-2ct. 2-5ct. >5ct. (ct) (ct) (cphm) (ct)

BLK_06 458 77 21 11 7 116 183.75 1.58 40.16 53.15BLK_182 735 34 8 1 0 43 25.35 0.59 3.45 3.70BLK_193 45 - - - 1 1 32.20 32.20 71.56 32.20Notes1 - The DMS treats material in the 1.2 to 30mm size range2 - Processing of sample BLK_18 is not complete about 3,600m3 has been excavated

3 - Excavation and processing of BLK_19 is ongoing. It is planned to process about 400m3

4 - Grades quoted as cphm - carats per 100 cubic metres

Table 1: Diamond recoveries from BLK_06, BLK_18 and BLK_19

Bulk sample BLK_19For

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Figure 1 – Location of Geology and Sampling

For further information, please contact;

MILES KENNEDYMANAGING DIRECTOR

Tel +61-8 9489 9200

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Competent Person’s StatementInformation in this announcement that relates to exploration results, mineral resources or ore reserves is based on andfairly represents information and supporting documentation prepared and compiled by David Jones BSc (Hons) MSc ofAscidian Prospecting Pty Ltd, who is a Corporate Member of the Australasian Institute of Mining and Metallurgy. MrJones is a director of Lucapa Diamond Company. Mr Jones has sufficient experience which is relevant to the style ofmineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as aCompetent Person as defined in the 2012 Edition of the Australasian Code for Reporting Exploration Results, MineralResources and Ore Reserves. Mr Jones consents to the inclusion in the announcement of the matters based on thisinformation in the form and context in which it appears.

Some of the information in this announcement may relate to previously released exploration data disclosed under theJORC Code 2004. It has not been updated to comply with the JORC Code 2012 on the basis that the information has notmaterially changed since it was last reported and is based on and fairly represents information and supportingdocumentation prepared and compiled by David Jones BSc (Hons) MSc of Ascidian Prospecting Pty Ltd, who is aCorporate Member of the Australasian Institute of Mining and Metallurgy. Mr Jones is a director of Lucapa DiamondCompany. Mr Jones has sufficient experience which is relevant to the style of mineralisation and type of deposit underconsideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Editionof the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves. Mr Jones consents tothe inclusion in the announcement of the matters based on this information in the form and context in which it appears.

Forward-Looking StatementsThis ASX release has been prepared by Lucapa Diamond Company Limited. This document contains backgroundinformation about Lucapa Diamond Company Limited and its related entities current at the date of this announcement.This is in summary form and does not purport to be all inclusive or complete. Recipients should conduct their owninvestigations and perform their own analysis in order to satisfy themselves as to the accuracy and completeness of theinformation, statements and opinions contained in this announcement. This announcement is for information purposesonly. Neither this document nor the information contained in it constitutes an offer, invitation, solicitation orrecommendation in relation to the purchase or sale of shares in any jurisdiction.

This announcement may not be distributed in any jurisdiction except in accordance with the legal requirementsapplicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply in their ownjurisdiction. A failure to do so may result in a violation of securities laws in such jurisdiction. This document does notconstitute investment advice and has been prepared without taking into account the recipient’s investment objectives,financial circumstances or particular needs and the opinions and recommendations in this representation are notintended to represent recommendations of particular investments to particular investments to particular persons.Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactionsinvolve risks, which include (among others) the risk of adverse or unanticipated market, financial or politicaldevelopments.

No responsibility for any errors or omissions from this document arising out of negligence or otherwise is accepted. Thisdocument does include forward-looking statements. Forward-looking statements are only predictions and are subject torisks, uncertainties and assumptions which are outside the control of Lucapa Diamond Company Limited. Actual values,results, outcomes or events may be materially different to those expressed or implied in this announcement. Giventhese uncertainties, recipients are cautioned not to place reliance on forward-looking statements.

Any forward-looking statements in this ASX release speak only at the date of issue of this announcement. Subject toany continuing obligations under applicable law and ASX Listing Rules, Lucapa Diamond Company Limited does notundertake any obligation to update or revise any information or any of the forward-looking statements in this documentor any changes in events, conditions or circumstances on which any such forward-looking statement is based.F

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Appendix - Reporting of diamond exploration results for the Lulo Project– JORC Code (2012) requirements –

Sampling Techniques and DataCriteria JORC Code Explanation Lucapa CommentarySamplingtechniques

• Nature and quality of sampling (eg cut channels,random chips, or specific specialised industrystandard measurement tools appropriate to theminerals under investigation, such as down holegamma sondes, or handheld XRF instruments,etc). These examples should not be taken aslimiting the broad meaning of sampling.• Include reference to measures taken to ensuresample representivity and the appropriatecalibration of any measurement tools or systemsused.• Aspects of the determination of mineralisationthat are Material to the Public Report.In caseswhere ‘industry standard’ work has been done thiswould be relatively simple (eg ‘reverse circulationdrilling was used to obtain 1 m samples fromwhich 3 kg was pulverised to produce a 30 g chargefor fire assay’). In other cases more explanationmay be required, such as where there is coarse goldthat has inherent sampling problems. Unusualcommodities or mineralisation types (egsubmarine nodules) may warrant disclosure ofdetailed information.

Bulk sample results are reported. The bulksamples were collected from surfaceexcavations using an excavator and trucks. ForBLK_18 and BLK_19, overburden of Kalaharisand and Calonda Formation sand and siltwere stripped and basal Calonda gravelexposed. The gravel + some underlyingbasement material (<30cm) was excavated.

The sampling is exploratory in nature andgenerally is seeking to identify diamondiferouslithologies. Samples are relatively large(typically >100m3) and by their nature arerepresentative. In the case of BLK_18 four pitswere excavated over a wider area to improverepresentivity of the sample.

Diamonds occur in very low concentrations inmost lithologies. They are also occur asdiscrete crystal particles and these must bephysically separated and recovered todetermine grade. Individual diamonds areunique and their value depends on factorsincluding size, shape, colour and clarity. Largesamples (tens to hundreds of tonnes) arerequired to identify the presence of commercialdiamonds. Samples in the order of tens of orhundreds of thousands of tonnes are requiredto establish reliable grade and value fordiamond deposits

Drillingtechniques

• Drill type (e.g. core, reverse circulation, open-holehammer, rotary air blast, auger, Bangka, sonic,etc) and details (e.g. core diameter, triple orstandard tube, depth of diamond tails, face-sampling bit or other type, whether core is orientedand if so, by what method, etc).

No drilling is reported in this document.

Drill samplerecovery

• Method of recording and assessing core and chipsample recoveries and results assessed.• Measures taken to maximise sample recoveryand ensure representative nature of the samples.•Whether a relationship exists between samplerecovery and grade and whether sample bias mayhave occurred due to preferential loss/gain offine/coarse material.

No drilling is reported in this document Sample recovered using an excavator and

front-end loader. Sample area visuallyinspected and all gravels excavated tobasement.

No relationship appears to exist betweensample recovery and grade. All material withinthe sampled interval is collected for treatment.

Logging •Whether core and chip samples have beengeologically and geotechnically logged to a level ofdetail to support appropriate Mineral Resourceestimation, mining studies and metallurgicalstudies.•Whether logging is qualitative or quantitative innature. Core (or costean, channel, etc)photography.

Sample pits are lithologically logged andmeasured to determine gravel volumes.

Logging is semi-quantitative with edgethicknesses measured of the entire pit. Pits arephotographed, but the photography is notsystematic.

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•The total length and percentage of the relevantintersections logged.

All excavated faces of the pits are logged

Sub-samplingtechniques andsamplepreparation

•If core, whether cut or sawn and whether quarter,half or all core taken.•If non-core, whether riffled, tube sampled, rotarysplit, etc and whether sampled wet or dry.•For all sample types, the nature, quality andappropriateness of the sample preparationtechnique.•Quality control procedures adopted for all sub-sampling stages to maximise representivity ofsamples.•Measures taken to ensure that the sampling isrepresentative of the in situ material collected,including for instance results for fieldduplicate/second-half sampling.•Whether sample sizes are appropriate to thegrain size of the material being sampled.

Not core. No sub-samples are taken. Allmaterial excavated is processed to recoverdiamonds.

Most of the samples are excavated dry and allmaterial is taken.

The sampling and sample preparation areidentical to those that would be used formining and are considered appropriate for thistype of sampling.

Samples are disaggregated during excavationand washed through a scrubber. The process isidentical to that which would be used formining and results are consideredrepresentative.

Sample size is appropriate for the materialbeing sampled.

Quality of assaydata andlaboratory tests

•The nature, quality and appropriateness of theassaying and laboratory procedures used andwhether the technique is considered partial ortotal.•For geophysical tools, spectrometers, handheldXRF instruments, etc, the parameters used indetermining the analysis including instrumentmake and model, reading times, calibrationsfactors applied and their derivation, etc.•Nature of quality control procedures adopted (e.g.standards, blanks, duplicates, external laboratorychecks) and whether acceptable levels of accuracy(i.e. lack of bias) and precision have beenestablished.

Samples are processed though a Dense MediaSeparation (DMS) plant. Recovery in the sizefractions used on the plant is considered total.

Samples are processed through the Company’sDense Media Separation Plant to prepare aheavy concentrate. Diamonds are recoveredfrom the heavy concentrate using a Flowsort x-ray sorting machine followed by visual sorting.

DMS efficiency is monitored using densitybeads

Verification ofsampling andassaying

•The verification of significant intersections byeither independent or alternative companypersonnel.•The use of twinned holes.•Documentation of primary data, data entryprocedures, data verification, data storage(physical and electronic) protocols.•Discuss any adjustment to assay data.

No verification of sample data at anindependent facility has been undertaken dueto the very large size of the samples and thelack of appropriate facilities in Angola.

Twinned holes are not used because of the sizeof the sample.

Entry of primary data has been checked andloaded into a sampling spreadsheet.

Assay data are not adjustedLocation of datapoints

•Accuracy and quality of surveys used to locatedrill holes (collar and down-hole surveys), trenches,mine workings and other locations used in MineralResource estimation.•Specification of the grid system used.•Quality and adequacy of topographic control.

Sample sites were located using a hand heldGPS with a nominal accuracy of about 5m.

The grid system is WGS84 Zone 34L Topographic control uses Digital Terrain

Models collected during aeromagnetic surveys.In pit measurements are recorded with tapemeasures

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Data spacingand distribution

•Data spacing for reporting of Exploration Results.•Whether the data spacing and distribution issufficient to establish the degree of geological andgrade continuity appropriate for the MineralResource and Ore Reserve estimation procedure(s)and classifications applied.•Whether sample compositing has been applied.

Data in this report comes from individual pitswhere all the material from that pit has been,or will be processed.

The pit spacing is currently related toexploration and is not appropriate for MineralResource and Ore Reserve estimation.

Sample compositing has been applied for theBLK_18 sample. For this sample 4 pits over awide area were excavated to improve samplerepresentivity

Orientation ofdata in relationto geologicalstructure

•Whether the orientation of sampling achievesunbiased sampling of possible structures and theextent to which this is known, considering thedeposit type.•If the relationship between the drilling orientationand the orientation of key mineralised structures isconsidered to have introduced a sampling bias,this should be assessed and reported if material.

The samples are considered spot sampleswithin either an alluvial or kimberlitic body.

Insufficient data exists to determine whethersample bias is present

Sample security • The measures taken to ensure sample security.

Sample stockpiles are located near theCompany’s processing facility and are guardedby armed security personnel at all times.

Security of processing and diamond recovery ismonitored by company and Angolan StateDiamond Security personnel.

Audits or reviews• The results of any audits or reviews of samplingtechniques and data.

The sampling techniques are industry standardand no audits or reviews have been undertaken

Reporting of Exploration ResultsCriteria JORC Code Explanation Lucapa CommentaryMineraltenement andland tenurestatus

•Type, reference name/number, location andownership including agreements or material issueswith third parties such as joint ventures,partnerships, overriding royalties, native titleinterests, historical sites, wilderness or nationalpark and environmental settings.•The security of the tenure held at the time ofreporting along with any known impediments toobtaining a licence to operate in the area.

The 1994 legislation covering the Angolandiamond industry stipulates that onlyENDIAMA (Empresa Nacional de Diamantes deAngola, the State Diamond Company) or jointventures with ENDIAMA, can hold diamondmining rights awarded by the Council ofMinisters.

Under the terms of the Lulo Joint VentureAssociation Agreements, separate titles aregranted for alluvial and kimberlite mining. Theexploration for both alluvials and kimberliteson the Lulo Concession is a requirement underthe Act.

The Angolan Government Gazette, dated 24December 2007, authorized the formation of aJoint Venture for the exercise of prospecting,evaluation and mining of secondary (alluvial)diamond deposits. These rights were grantedfor a maximum period of five years. Should theJoint Venture wish to extend the agreementbeyond five years, then 50% of the Concessionwould be relinquished. The equity distributionis: ENDIAMA 32.2%, Lucapa Diamond CompanyLtd 40%*, Rosas e Petalas S.A. 28% (*Thisinterest will be reduced to 30% afterrecoupment of the investment.)

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On 18 July 2008, the authorization for thekimberlite exploration and mining wasgazetted. The equity distribution is: ENDIAMA33%, Lucapa Diamond Company Ltd 39%*,Rosas e Petalas S.A. 28% (*This interest willbe reduced to 30% after recoupment of theinvestment.).

Lucapa Diamond Company Limited is theoperator of the Concession and is obliged tofund and execute all exploration activitiesaccording to a Program of Work pre-approvedby ENDIAMA.

The Joint Ventures Alluvial licence wasextended for two years to December 2014.Application to extend Kimberlite Licence fortwo years until June 2015 is being processed.

Exploration doneby other parties

• Acknowledgment and appraisal of exploration byother parties.

Limited exploration has been undertaken bystate controlled entities.

Parts of the area have been exploited byartisanal miners – no records of this work areavailable.

Geology • Deposit type, geological setting and style ofmineralisation.

Significant diamond bearing alluvial systems,of Mesozoic to Recent ages overly a major, butrelatively poorly explored, kimberlite field. Thekimberlite pipes intrude flat-lying Proterozoicsediments within the Lucapa graben. Thekimberlite field is believed to be the source ofthe alluvial diamonds.

Drill holeInformation

•A summary of all information material to theunderstanding of the exploration results includinga tabulation of the following information for allMaterial drill holes:•easting and northing of the drill hole collar•elevation or RL (Reduced Level – elevation abovesea level in metres) of the drill hole collar•dip and azimuth of the hole•down hole length and interception depth•hole length.•If the exclusion of this information is justified onthe basis that the information is not Material andthis exclusion does not detract from theunderstanding of the report, the CompetentPerson should clearly explain why this is the case.

No drilling is reported in this document. The location of the sample pits is shown on

maps within this report. The map providesdata on the location and relative elevations ofthe samples. The sample pits are surfaceexcavations and other data required in thecode is not material and its exclusion does notdetract from the understanding of the report.

Dataaggregationmethods

•In reporting Exploration Results, weightingaveraging techniques, maximum and/or minimumgrade truncations (e.g. cutting of high grades) andcut-off grades are usually Material and should bestated.•Where aggregate intercepts incorporate shortlengths of high grade results and longer lengths oflow grade results, the procedure used for suchaggregation should be stated and some typicalexamples of such aggregations should be shown indetail.

No weighting, averaging, grade truncations orcut-off grades have been used.

No short or long length aggregation applicable.For

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•The assumptions used for any reporting of metalequivalent values should be clearly stated.

No metal equivalent values are used

Relationshipbetweenmineralisationwidths andintercept lengths

•These relationships are particularly important inthe reporting of Exploration Results.•If the geometry of the mineralisation with respectto the drill hole angle is known, its nature shouldbe reported.•If it is not known and only the down hole lengthsare reported, there should be a clear statement tothis effect (e.g. ‘down hole length, true width notknown’).

Results quoted are from surface pits. For thealluvial sample, the entire gravel horizon wassampled.

Non-drillhole, in pit sampling, not applicablelength concepts.

Diagrams • Appropriate maps and sections (with scales) andtabulations of intercepts should be included forany significant discovery being reported Theseshould include, but not be limited to a plan view ofdrill hole collar locations and appropriate sectionalviews.

Appropriate map and plans for the reportedmineralisation with scale and north points areincluded with the text of the report.

Balancedreporting

• Where comprehensive reporting of allExploration Results is not practicable,representative reporting of both low and highgrades and/or widths should be practiced to avoidmisleading reporting of Exploration Results.

The results reported are all of the results. Forboth BLK_18 and BLK_19 the results areprogress results with more material still to betreated. Results reported are up to 31-12-2013

Othersubstantiveexploration data

• Other exploration data, if meaningful andmaterial, should be reported including (but notlimited to): geological observations; geophysicalsurvey results; geochemical survey results; bulksamples – size and method of treatment;metallurgical test results; bulk density,groundwater, geotechnical and rockcharacteristics; potential deleterious orcontaminating substances.

Previously reported drilling, pitting and bulksampling data were used to site bulk samplepits. The collar locations of drill holes,exploration pits and bulk samples are shownon diagrams within the report

Further work •The nature and scale of planned further work (e.g.tests for lateral extensions or depth extensions orlarge-scale step-out drilling).•Diagrams clearly highlighting the areas ofpossible extensions, including the main geologicalinterpretations and future drilling areas, providedthis information is not commercially sensitive.

Excavation and processing of material fromBLK_18 and BLK_19 is ongoing and results willbe reported progressively. Additional bulksampling of the Se251 kimberlite will beundertaken

Estimation and Reporting of Diamonds and Other GemstonesCriteria JORC Code Explanation Lucapa Commentary

Indicatorminerals

• Reports of indicator minerals, such aschemically/physically distinctive garnet, ilmenite,chrome spinel and chrome diopside, should beprepared by a suitably qualified laboratory.

No indicator mineral results are reported

Source ofdiamonds

• Details of the form, shape, size and colour of thediamonds and the nature of the source ofdiamonds (primary or secondary) including therock type and geological environment.

The diamonds reported from BLK_18 have avariety of sizes, shapes and colours. The singlediamond reported from BLK_19 is described inthe report.The diamonds were recovered fromalluvial gravels of the Mid-Cretaceous Calondaconglomerate. These are essentiallyfanglomerates and braided stream sediments.At Lucapa the primary, kimberlitic source ofthe diamonds are believed to be kimberliteslocated within the Lulo Concession.

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Samplecollection

•Type of sample, whether outcrop, boulders, drillcore, reverse circulation drill cuttings, gravel,stream sediment or soil, and purpose (e.g. largediameter drilling to establish stones per unit ofvolume or bulk samples to establish stone sizedistribution).•Sample size, distribution and representivity.

Samples reported are bulk samples of alluvialgravels. The samples are designed todetermine whether the units sampled arediamondiferous and to what extent. Thesamples are also designed to determine stonesize distribution and eventually diamondvalues.

Lucapa are conducting exploration activities tolocate diamondiferous lithologies. The samplesize, distribution and representivity areappropriate for this activity

Sampletreatment

•Type of facility, treatment rate, andaccreditation.•Sample size reduction. Bottom screen size, topscreen size and re-crush.•Processes (dense media separation, grease, X-ray,hand-sorting, etc).•Process efficiency, tailings auditing andgranulometry.•Laboratory used, type of process for microdiamonds and accreditation.

Samples are processed through Lucapa’s DMSplant. The plant uses a 420mm diametercyclone and has a nominal treatment rate of 50tonnes per hour. The plant is not accredited.

Samples are disaggregated during excavationand washed through a scrubber. The bottomscreen size is 1.2mm (slotted) and the top sizeis 30mm.

The recovery process involves DMS separation,X-ray sorting of the heavy concentrate andhand sorting of the X-ray concentrate. Largerdiamonds are characterised using a ZVI YehudaF1000 Colorimeter.

Lucapa are processing the material through arecently commissioned DMS plant. Processingefficiency has been demonstrated in densitybead recovery tests. Tails auditing andgranulometry studies have not beencompleted.

Microdiamonds are not reported.

Carat • One fifth (0.2) of a gram (often defined as ametric carat or MC).

Reported as carats.

Sample grade •Sample grade in this section of Table 1 is used inthe context of carats per units of mass, area orvolume.•The sample grade above the specified lower cut-off sieve size should be reported as carats per drymetric tonne and/or carats per 100 dry metrictonnes. For alluvial deposits, sample gradesquoted in carats per square metre or carats percubic metre are acceptable if accompanied by avolume to weight basis for calculation.•In addition to general requirements to assessvolume and density there is a need to relate stonefrequency (stones per cubic metre or tonne) tostone size (carats per stone) to derive samplegrade (carats per tonne).

Sample grade is quoted in the text in units ofcarats per 100 cubic metres for alluvials.

A nominal 2.1 tonnes per cubic metre isascribed to the alluvial gravels and weatheredkimberlite. Limited density measurementshave been made and the use of an “average”density is considered appropriate for the stageof exploration.

The table in the report reports average caratsper stone and carats per unit volume. Stonesper cubic metre are not reported but can becalculated from the reported data.

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Reporting ofExplorationResults

•Complete set of sieve data using a standardprogression of sieve sizes per facies. Bulk samplingresults, global sample grade per facies. Spatialstructure analysis and grade distribution. Stonesize and number distribution. Sample head feedand tailings particle granulometry.•Sample density determination.•Per cent concentrate and undersize per sample.•Sample grade with change in bottom cut-offscreen size.•Adjustments made to size distribution for sampleplant performance and performance on acommercial scale.•If appropriate or employed, geostatisticaltechniques applied to model stone size,distribution or frequency from size distribution ofexploration diamond samples.

•The weight of diamonds may only be omittedfrom the report when the diamonds are consideredtoo small to be of commercial significance. Thislower cut-off size should be stated.

Exploration results are reported in the text ofthe report.

The density for both alluvials and weatheredkimberlite samples has been determined at 2.1tonnes per cubic metre. This number wasmeasured for previous samples and has beenapplied throughout. An approximation of thissort is considered appropriate for the stage ofexploration.

Percent concentrate and undersize have notbeen measure and are not considered materialto the understanding of this report.

Variation in grade with changes in bottom cut-off screen size has not been determined.Lucapa’s DMS plant is considered to be a pilotplant and plant parameters are the same aswould be used on a commercial plant.

Geostatistical studies have not beenundertaken because of the relatively smallnumber of diamonds recovered anduncertainties of using this data for alluvialdeposits.

The total weight of diamonds recovered isreported in the text as are the upper and lowercut-off sizes.

Grade estimationfor reportingMineralResources andOre Reserves

•Description of the sample type and the spatialarrangement of drilling or sampling designed forgrade estimation.•The sample crush size and its relationship to thatachievable in a commercial treatment plant.•Total number of diamonds greater than thespecified and reported lower cut-off sieve size.•Total weight of diamonds greater than thespecified and reported lower cut-off sieve size.•The sample grade above the specified lower cut-off sieve size.

No Mineral Resources or Ore Reserves areincluded in the report

Value estimation •Valuations should not be reported for samples ofdiamonds processed using total liberation method,which is commonly used for processing explorationsamples.•To the extent that such information is notdeemed commercially sensitive, Public Reportsshould include:•diamonds quantities by appropriate screen sizeper facies or depth.•details of parcel valued.•number of stones, carats, lower size cut-off perfacies or depth.•The average $/carat and $/tonne value at theselected bottom cut-off should be reported in USDollars. The value per carat is of criticalimportance in demonstrating project value.•The basis for the price (e.g. dealer buying price,dealer selling price, etc).

No value estimates are given for the diamondsdescribed in this report.

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•An assessment of diamond breakage.

Security andintegrity

•Accredited process audit.•Whether samples were sealed after excavation.•Valuer location, escort, delivery, cleaning losses,reconciliation with recorded sample carats andnumber of stones.•Core samples washed prior to treatment for microdiamonds.•Audit samples treated at alternative facility.•Results of tailings checks.•Recovery of tracer monitors used in sampling andtreatment.•Geophysical (logged) density and particle density.•Cross validation of sample weights, wet and dry,with hole volume and density, moisture factor.

There has been no accredited process audit. Samples were monitored by armed guards

after excavation and the process operation wasmonitored by Angolan State Diamond Securitypersonnel.

Diamonds recovered are stored in a lockedvault and retained on site. The diamonds havenot yet been cleaned or valued.

Microdiamonds were not processed No audit samples were collected because of

the size of the bulk samples. Tailings have not been checked. Tracer monitors were used in sample

treatment with tracer recovery in all tested sizefractions >95% for tracers of density 3.5 g/cc

Geophysical densities were not determined. Cross validation of weights with hole volume

and density is not considered appropriate forthe stage of exploration

Classification • In addition to general requirements to assessvolume and density there is a need to relate stonefrequency (stones per cubic metre or tonne) tostone size (carats per stone) to derive grade (caratsper tonne). The elements of uncertainty in theseestimates should be considered, and classificationdeveloped accordingly.

Insufficient diamonds have been recovered toallow Lucapa to quantify the uncertain in stonefrequency, stone size or diamond grade, as yet.

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