Lucapa Diamond Company Limited (ASX: LOM) ('Lucapa' or 'the Company') is pleased to announce another key advancement in the Company's cutting & polishing strategy, with Lulo alluvial mining company Sociedade Mineira Do Lulo ('SML') entering into a cutting & polishing agreement with leading diamond manufacturing group Safdico International ('Safdico').

Safdico is a subsidiary of Graff International ('Graff'), one of the world's finest high-end jewellery houses. Safdico supplies Graff with some of the most iconic and valuable polished diamonds sold in Graff stores.

Safdico, as a Preferred Buyer, can purchase up to 60% of Lulo's annual alluvial rough production from SML (Lucapa 40% and operator), as is permitted under Angola's transformative new diamond marketing regulations.

The Lulo diamonds purchased by Safdico are placed into the cutting & polishing partnership. Once procurement and manufacturing costs are deducted, the profits generated beyond the mine gate from the sale of the resultant polished diamonds are shared equally between SML and Safdico.

To date, Safdico has purchased 4,900 carats of run of mine rough diamonds from SML under this commercial partnership. SML is due its first share of the partnership profits from Safdico this quarter (Q1 2020). This new Lulo revenue stream represents another key milestone for Lucapa's value-adding strategy.

The new revenues streams come as SML completes a self-funded US$12 million capital investment program designed to expand total group production to >60,000 carats in 2020 (on a 100% basis). This production increase, coupled with the new revenue streams generated from the cutting & polishing agreement with Safdico, will enable SML to generate higher returns for its partners and make more regular loan repayments to Lucapa.

ABOUT LUCAPA

Lucapa is a growing diamond company with high-value mines in Angola (Lulo) and Lesotho (Mothae). The Lulo alluvial mine and Mothae kimberlite mine both produce large and high-value diamonds, with >75% of revenues generated from the recovery of +4.8 carat stones. Lulo has produced 14 +100 carat diamonds to date and is one of the highest average US$ per carat alluvial diamond producers in the world. Lucapa and its Lulo partners continue to advance exploration programs which aim to identify the primary kimberlite sources of these exceptional alluvial gems.

The new 1.1 Mtpa Mothae kimberlite mine in diamond-rich Lesotho commenced commercial diamond mining operations in January 2019. It produced > 30,000 carats in its first year of production, including 10 +50 carat diamonds. Lucapa's Board and management team have decades of diamond industry experience across the globe with companies including De Beers and Gem Diamonds.

Forward Looking Statements

This announcement has been prepared by the Company. This document contains background information about the Company 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 own investigations and perform their own analysis in order to satisfy themselves as to the accuracy and completeness of the information, statements and opinions contained in this announcement. This announcement is for information purposes only.

This announcement may not be distributed in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply in their own jurisdiction. A failure to do so may result in a violation of securities laws in such jurisdiction. This document does not constitute 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 not intended to represent recommendations of particular investments to particular persons.

Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments. No responsibility for any errors or omissions from this document arising out of negligence or otherwise is accepted. This document does include forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of the Company.

Actual values, results, outcomes or events may be materially different to those expressed or implied in this announcement. Given these uncertainties, recipients are cautioned not to place reliance on forwardlooking statements. Any forward-looking statements in this announcement speak only at the date of issue of this announcement. Subject to any continuing obligations under applicable law and ASX Listing Rules, the Company does not undertake any obligation to update or revise any information.

Contact:

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