VANCOUVER, BC — January 20, 2026 — Leads & Copy — Lucara Diamond Corp. (TSX: LUC) (BSE: LUC) (Nasdaq FNGM: LUC) has applied to the Toronto Stock Exchange (TSX) for a financial hardship exemption under Section 604(e) of the TSX Company Manual regarding its previously announced non-brokered private placement to raise $165.0 million.
The company intends to finalize subscription agreements for a non-brokered private placement where investors will subscribe for 1,031,250,000 common shares at $0.16 per share, totaling $165.0 million. The offering price reflects a discount of 23.57% to the volume weighted average price (VWAP) for the 5 days ending January 9, 2026, and 22.43% to the VWAP for the 5 days ending January 14, 2026. A finder’s fee of 5% may be paid on a portion of the private placement, excluding the Lundin Family Trusts’ participation.
Lucara will use the proceeds to address a liquidity shortfall, continue advancing the Karowe underground project (UGP), pursue longer-term project financing and for general working capital. The private placement is expected to close in late January, subject to definitive documentation, exchange approvals, and other conditions.
The common shares issued will be subject to a four-month hold period. Absent the exemption, the private placement would require approval from a majority of disinterested shareholders, excluding entities controlled by the Lundin Family Trusts.
Trusts settled by the late Adolf H. Lundin are participating in the private placement. Nemesia S.à.r.l., controlled by the Lundin Family Trusts, is Lucara’s largest shareholder. The Lundin Family Trusts are considered an “insider” and a “related party.” The Lundin Family Trust’s subscription of $54,038,555.84 under the Private Placement would represent approximately 56.45% of the Company’s current market capitalization. Insider participation in the Private Placement will result in insiders having acquired greater than 10% of the issued and outstanding Common Shares of the Company in a six-month period, given entities controlled by the Lundin Family Trusts are subscribing for 337,740,974 Common Shares (being 73.86% of the Common Shares currently issued and outstanding) as part of the Private Placement. Following the Closing Date, the Lundin Family Trusts will hold 458,410,371 Common Shares, representing approximately 30.80% of the Common Shares issued and outstanding on a post-closing basis.
The company is seeking a “financial hardship” exemption from shareholder approval requirements, stating it is in serious financial difficulty, and the private placement is designed to address these issues in a timely manner.
A special committee of independent directors reviewed the company’s financial situation and recommended the exemption application. The board determined that Lucara is in serious financial difficulty, the private placement will improve its situation, and it is reasonable in the circumstances.
The company has experienced financial difficulties due to factors including a review of the UGP ore extraction methodology and increased funding requirements. An updated feasibility study on January 5, 2026, estimated UGP costs at US$779.2 million.
Lucara has fully drawn on its project finance facilities and accessed shareholder guarantees to support UGP development. The project has advanced as anticipated, with both production and ventilation shafts reaching final depth. Lateral development requires significant equipment purchases to meet project deliverables and achieve commercial production in early 2028.
To meet liquidity needs, the company funded a Cost Overrun Reserve Account and drew from a shareholder standby undertaking (SSU). By December 31, 2025, Lucara had fully drawn its US$190.0 million Project Facility, US$30.0 million Working Capital Facility (WCF) and US$28.0 million SSU.
The company cannot generate sufficient operating cash flow or access additional loan facilities to fund UGP development. It did not meet certain covenant obligations under its Project facility, resulting in events of default. An agreement was reached with lenders on December 30, 2025, to waive all events of default.
There is no assurance that the TSX will accept the exemption application. The TSX will place the Common Shares under delisting review. The Company may be required to delist from the TSX and pursue an alternative listing on the TSX Venture Exchange.
William Lamb, President and CEO of Lucara, stated that the exemption is a prudent step that provides added flexibility as the company completes this capital-intensive phase of development.
Contact: William Lamb, President and CEO of Lucara.
Source: Lucara Diamond Corp.
