Lucara draws shareholder liquidity, extends $50 million facility again

By William Gullotti

Buffalo, N.Y., Nov. 15 – Lucara Diamond Corp. received another short-term extension of the maturity of its $50 million senior secured working capital facility, another extension to the deferral for the requirement to place $52.9 million in a cost overrun reserve account and drew $15 million from a liquidity support guarantee, according to a press release on Wednesday.

The working capital facility was extended to Dec. 15 from Nov. 15.

As previously reported, the facility’s most recent maturity extension to Nov. 15 followed a previous extension to Nov. 1.

As previously reported, the initial extension froze further draws from the debt package, which consists of a $170 million project loan and the working capital facility.

$90 million is drawn on the project loan and $35 million is outstanding on the working capital facility. The cost overrun account balance remains $18.4 million.

As previously reported, the company’s largest shareholder Nemesia Sarl provided a liquidity support guarantee in favor of the lenders for up to $15 million in aggregate, now extended to the new deadline, while discussions with lenders are ongoing.

In return for the first extension, the company issued a debenture to Nemesia to be drawn if Nemesia has to make a payment because of the guarantee.

On Nov. 14, Lucara drew the balance of the debenture, issuing 450,000 common shares to Nemesia as consideration for the liquidity support provided. For each $500,000 drawn down under the guarantee, Lucara will be required to issue, subject to the receipt of all required regulatory approvals, 7,500 common shares per month to Nemesia until the amounts borrowed are repaid.

Lucara is a diamond explorer based in Vancouver, B.C.

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