Lucara to Divest of its Mothae Asset in Lesotho

The company considered a range of development options for Mothae, and although it has been proven to be diamondiferous, Mothae does not meet Lucara's "disciplined investment criteria for its targeted return on capital and its forecast generation of long term free cash flow potential".

Lucara has decided to enter into a process of divestiture of the asset. Discussions have been held with the Ggovernment of Lesotho and they are supportive of the firm's approach and have committed to provide support for any potential new owner of the project. The Ccompany intends to report a non-cash impairment of the book value for the Mothae asset in its year-end accounts. Current book value and estimated rehabilitation provision costs total approximately $21 million.

William Lamb, President and Chief Executive Officer commented, "Lucara has been very fortunate to have the opportunity to evaluate the Mothae asset and develop relations with the government and people of Lesotho. Based on our development strategy and the extensive work conducted on understanding the economics of the Mothae asset, we do not believe that sufficient shareholder value can be gained through the expenditure of current cash reserves on further assessment and development of this project.

"The company will continue to focus on its Botswana production and exploration assets while assessing other value accretive opportunities. The company believes that this operational and investment strategy, along with our current dividend policy, will continue to deliver maximum return to our shareholders."