A Lundin Group Company

WHERE BIGGER ISTM

Karowe MineMaking Diamond History

Lucara Diamond Corp. is a Canadian diamond mining company with a producing mine and exploration licenses in Botswana.

The mine is called “Karowe” which means precious stone in the local language. The mine was completed in 2012 on time and within a budget of US$120 million. It is a state-of-the-art operation comprising an open pit mine, crushers, AG mill and a XRT, DMS and XRF recovery plant.

About Lucara

Share Capital (as of Nov 9, 2016)

Outstanding 381.7 million

Fully Diluted 386.7 million

Market Cap ~$1,271 billion

Cash $49.7 million

The mine has an annual production of approximately 350,000-380,000 carats of gem quality (including Type IIa) diamonds which are sold through regularly scheduled tenders throughout the year. Of importance, in addition to its regular diamond production, the Karowe mine has been producing some very large, exceptionally high quality diamonds (including some coloured stones). These exceptional stones are sold by special tender as recovery dictates.

The ongoing frequency of the recovery of the very large, exceptional stones highlighted the need for a plant modification that would facilitate greater recovery of these very large stones. The Company installed state-of-the-art XRT technology, the first of its kind to be used in a bulk sorting application.

Within weeks of completing the plant modification, the Karowe mine made diamond history with the recovery of an exceptionally beautiful 1,109 carat Type IIa diamond. This spectacular diamond was named Lesedi La Rona which means “Our Light” in the Setswana language.

The consistency and quality of Lucara’s diamonds sold on regular tender have enjoyed such a strong and loyal following that they have become a quality “brand” in the industry. We are very honoured by and appreciative of this reputation and will always maintain the highest of standards.

Revenue for the nine months ended September 30, 2016 was $229 million with operating margins of 83%. Return on equity was 30%. Despite the global downturn in markets, the Company has positive returns and cash flow is strong as top quality stones are in their own special niche in the diamond market. This is particularly true with the very large exceptional stones which garner international attention amongst collectors and the major jewelry houses. The Company pays a $0.06 annual dividend paid on a quarterly basis and may pay a special dividend from time to time as conditions permit. The Company paid a $0.45 per share special dividend to shareholders in 2016.

lucaradiamond.com

Trading – LUC: TSX LUC: BSE (Botswana) LUC: NASDAQ OMX (Stockholm)

lucaradiamond

Lucara Diamond Corporation

@LucaraDiamond

Lucara Financial Highlights

The Karowe mine employs over 800 people of which more than 98% are Batswana. Botswana has a long diamond mining history and has had a stable, effective government for many years. As a result, the revenues from the diamond industry have been invested in the country and the Batswana people enjoy excellent healthcare, education and infrastructure. The country expects all its mine operators to be good corporate citizens and promote and adhere to the highest environmental and sustainability standards. Botswana is party to the Kimberley Process. The Kimberley Process Certification Scheme (KPCS) imposes extensive requirements on its members to enable them to certify shipments of rough diamonds as conflict-free and prevent conflict diamonds from entering the legitimate trade. Under the terms of the KPCS, participating states must meet minimum requirements and must put in place national legislation and institutions; export, import and internal controls; and also commit to transparency and the exchange of statistical data. Participants can only legally trade with other participants who have also met the minimum requirements of the scheme, and international shipments of rough diamonds must be accompanied by a KP certificate guaranteeing that they are conflict-free.

In addition to its Karowe mine, the Company holds two high-potential exploration licences. These licences host at least three known diamondiferous kimberlites, BK02, AK11 and AK12. Bulk sampling is currently underway on the BK02 kimberlite.

Lucara is a public company trading under the symbol LUC on the TSX, Nasdaq Stockholm and BSE Botswana Exchange.

Three months ended September 30

Nine months ended September 30

In millions of U.S. dollars unless otherwise noted 2016 2015 2016 2015

$ $ $ $

Revenues* 38.1 90.9 229.4 158.6

Average price per carat sold ($/carat) 332 1,081 850 560

Operating expenses per carat sold ($/carat) 149 130 143 131

Operating margin per carat sold ($/carat) 183 951 707 429

Net income (Loss) for the period (3.8) 44.2 59.5 58.8

Earnings (Loss) per share (basic and diluted) (0.01) 0.12 0.16 0.15

Cash on hand 49.7 122.7 49.7 122.7

* Revenue is presented based on cash receipts received during the period and excludes tender proceeds received after each quarter end.

Karowe Mine Quick StatsLocation Botswana

Ownership 100% – Boteti Mining (Pty) Ltd.

Royalty 10%

Type Hard rock. Open pit. Mine plan to depth of 324 m

Status Mine development and Production

Resources & Mine plan based on Probable reserve from surface to a depth of 324 m of 36.2 mt containing 6.3 million carats

Indicated resource from surface to a depth of 400 m of 51 mt containing 8.2 million carats

Inferred resource from 400 m to 750 m of 21 mt containing 4 million carats

NI 43-101 Technical Report http://www.lucaradiamond.com/s/karowe-ReportID-655919.html

Mine Life Open pit operations to 2026 with further underground potential

Throughput 2.2-2.4 mtpa

2016/2017 $50 million approx. +Capital Program $7 million exploration budget

2016 Operating $25-$28 per tonne including waste minedContract mining and process plant operations

Production 350,000-380,000 carats per year

2016 Revenue $200-$220 million, excluding the sale of the two very large diamonds (Constellation and Lesedi La Rona)

Diamonds Large high value diamonds including exceptional stones

Diamond Sales Regular tenders throughout a year Exceptional stone tenders as recovery dictates Nine large and exceptional stone tenders to date, 131 diamonds sold with sales in excess of $350 million

Reserves

(Estimate)

Costs

ACCESS ROAD

OFFICE

BULK SAMPLE PLANT

OPEN PIT BOUNDARY

PROCESS WATER DAMS

PROCESSING FACILITIES

ORE STOCKPILES

WASTE ROCK DUMPS

SLIMES DAM

Karowe Mine Development

Karowe Mine Kimberlite Processing

Vibrating Grizzley

XRT Bulk Sorting

Sub Middle Course LargeX-Ray Recovery

Magnetic Separation

Recover Rejects

Mega Diamond Recovery XRT CQ3 2017

Autogenous Mill

Dense Media Separator

Ore from Mine

Hand Sorting

Pebble Crusher

Pebble Crusher Bleed Screen

Coarse Sizing Screen

Process Water

Tertiary Crusher

Secondary Gyratory CrusherBy

pass

De-Grit Cyclone

Thickener

CoarseTailings Disposal

Fine Tailings Disposal

Stockpile

Concentrate

Sizing Screen

Screening Plant

Primary Crusher

ExplorationIn 2014, the Company was awarded two high-potential exploration licences in the Orapa Kimberlite Field in close proximity to the Karowe Diamond Mine. These licences host at least three known diamondiferous kimberlites, BK02, AK11 and AK12.

A bulk sample plant was constructed and commissioned at the end of 2015 and sampling from the exploration sites, starting with BK02, commenced.

In Q3 2016, the Company completed sampling of an additional 5000 tonnes of kimberlite from the BK02 kimberlite. Processing of the second BK02 sample was 28% at the end of Q3 2016 A drill program commenced at AK11 during Q3 with plans to advance drill programs at BK02, AK13, and AK14 kimberlites during Q4 2016. The Company’s drilling program to test the AK06 kimberlite at depths below 400m was 55% complete and the drilling portion of the program is forecast to be complete by Q4 2016.

Lucara Exploration Licenses

Mines and Advanced Projects

Other Kimberlites

Town

Roads

Letlhakane

Letlhakane Mine

BK11 (Firestone Diamonds)

Orapa Mine

Mmatshumo

10 km

N

Gaborone

BOTSWANA

SOUTH AFRICA

ZIMBABWE

Karowe Mine

Gaborone

BOTSWANA

Block E (AK11,12,13,14)

Block A(BK02)

Name Surface areaDistance from Karowe

Year of discovery 2016 work program

Block A (BK02)

1.07 km2 30 km 1967 Trenching and bulk sampling for diamond content and size distribution analysis

Block E (AK11, 12, 13, and 14)

55.4 km2 15 km ~1970 Full site assessment and locate areas amenable for the extraction of a large volume of kimberlite for diamond content and size distribution analysis

Exploration Licences

Karowe Mine

The expansion and upgrading of the Letlhakane Abattoir is an innovative public-private partnership that will improve incomes for local livestock owners.

Corporate Social Responsibility

The Karowe Emerging Entrepreneurs Fund provides business training, targeted technical assistance, and affordable loans to micro- and small-enterprises resident in Boteti Sub-District.

Lucara continues to progress as a responsible corporation through our field practices, management systems in Environment, Health and Safety, contributions to the communities where we operate, and our commitment to ongoing stakeholder engagement. Corporate responsibility is central to our strategic and operational thinking. We cannot sustain good financial and operational performance without simultaneously achieving our objectives in health and safety, environmental stewardship, human resource development, and community investment. We believe our transparent approach to doing business is the only way to fully engage our stakeholders in a meaningful, mutually beneficial, relationship.

Our vision of Corporate Responsibility is premised upon a set of principles which guide our relationships with shareholders, employees, partners, governments, and the communities affected by our operations.

Lucara Diamond aims to create sustainable value in host communities in which we operate. Our operations contribute to the social and economic development and wealth of host communities through a number of channels:

• Wages and salaries paid to employees and contractors

• Taxes, royalties, and fees

• Procurement of goods and services

• Installation/upgrading of local infrastructure

• Support of community development programs

Lucara contributes directly to the Lundin Foundation, the philanthropic arm of the Lundin Group of Companies. The Foundation supports, through a combination of grants and impact investments, innovative, vertically-integrated approaches to poverty alleviation in the areas of agriculture, financial services for the poor, and private sector development.

Corporate Commitment

Founded in 2005, the Lundin Foundation designs, implements, and monitors initiatives aimed at commuting measurable and sustained benefits to populations impacted by extractive companies. These initiatives are divided into four thematic areas:

• Strengthening Resource Governance

• Education and Skills Training

• Local Procurement

• Economic Diversification

lundinfoundation.org

ABOUT LUNDIN FOUNDATION

Ramohube Fabric shop is a investee of Karowe Emerging Entrepreneurs Fund, Letlhakane.

Botswana Diamonds

Since independence in 1966, four decades of uninterrupted civilian leadership, progressive social policies, and significant capital investment have created one of the most dynamic economies in Africa. Mineral extraction, principally diamond mining, dominates economic activity, though tourism is a growing sector due to the country’s conservation practices and extensive nature reserves.

AFRICA

BOTSWANA

Founded by Adolf H. Lundin over forty years ago, the Lundin Group of Companies comprises twelve publicly traded companies focused on the resource sector. Our expertise ranges from early exploration to advanced development and production. Lundin companies produce a variety of commodities and operate in over twenty countries worldwide.

Lucara Diamond Corp. is one ofthe Lundin Group of Companies

LUNDIN GOLDFruta del Norte Project

NGEx RESOURCESJosemaria ProjectLos Helados ProjectFILO MININGFilo del Sol Project

ETRIONChile

LUNDIN MININGCandelaria Mining Complex

LUNDIN MININGEagle Mine

BLACKPEARL RESOURCESMooneyOnion LakeBlackrod

DENISON MINESMcClean Lake Mill/MineWheeler River Project

LUNDIN PETROLEUMJohan Sverdrup fieldEdvard Grieg fieldLUNDIN PETROLEUMNetherlandsFrance

LUNDIN MININGFreeport Cobalt Refinery

LUNDIN MININGZinkgruvan Mine

ETRIONItaly

ETRIONJapan

LUNDIN PETROLEUMLagansky Block

SHAMARAN PETROLEUMAtrush Block

AFRICA OILSouth Lokichar Basin South Omo and Rift Basin Area BlocksBlocks 10BB, 10BA, 9, 13T and 12A

AFRICA ENERGYBlock 2B

LUNDIN MININGTenke Fungurume Mine

LUCARA DIAMONDKarowe Diamond Mine

LUNDIN MININGNeves-Corvo Mine

LUNDIN PETROLEUMBertam field

LUNDIN PETROLEUMSouthern Barents Sea Area

Lucara’s Management & Directors

William Lamb, President & CEO, DirectorA process metallurgist with more than 20 years experience in the diamond and mineral processing industry.

Lukas Lundin, Chairman, Director

Internationally recognized financier and head of the Lundin Group of Companies.

Dr. John Armstrong, VP Mineral ResourcesHas over 25 years of experience in mineral exploration, mining and government. Has been involved in the planning and execution of successful diamond exploration and sampling programs ranging from generative to delineation and valuation.

Glenn Kondo, Chief Financial OfficerA highly qualified finance professional with extensive senior executive and corporate board experience in the mining industry, including many years with Anglo American.

Richard Clark, DirectorA securities lawyer from 1987 to 1993. A senior executive with the Lundin Group of Companies. Previously President of Red Back Mining.

Paul Conibear, DirectorA professional engineer with over 25 years experience in heavy industrial mining projects – instrumental in the development of Tenke Fungurume in the DRC and currently President and CEO of Lundin Mining.

Brian Edgar, DirectorA securities lawyer active in the public markets for over 25 years.

Marie Inkster, DirectorAn experienced mining executive, CPA, CA and current Chief Financial Officer of Lundin Mining Corporation.

Eira Thomas, DirectorA respected Canadian geologist responsible for the discovery of the Diavik Diamond project in the NWT.

We are passionate about our business and working in Botswana. Our management team and board comprise experienced and successful global mine builders and operators.

Forward-Looking Statements

Generally, forward-looking statements can be identified by the use of forward-looking terminology such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible” and similar expressions, or statements that events, conditions or results “will,” “may,” “could” or “should” occur or achieved.

Forward looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. The Company believes that expectations reflected in this forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information included in this document should not be unduly relied upon. In particular, this document may contain forward-looking information pertaining to the following: the estimates of the Company’s mineral reserve and resources; estimates of the Company’s production and sales volumes for the Karowe and Mothae project; estimated costs to construct the mines, startup, exploration and development plans and objectives, production costs, exploration and development expenditures and reclamation costs; expectation of diamond price and changes to foreign currency exchange rate; expectations regarding the need to raise capital; possible impacts of disputes or litigation and other risks and uncertainties describe under Risks and Uncertainties disclosed in the Company’s Annual Information Form. For important information related to the Company’s resource and reserve estimates, please see NI 43-101 Independant Technical Report dated Dec 31/13 and revised Feb 4/14 prepared by Mineral Services Canada Ltd. Report available on http://www.lucaradiamond.com/s/karowe-ReportID-655919.html

There can be no assurance that such statements will prove to be accurate, as the Company’s results and future events could differ materially from those anticipated in this forward-looking information as a result of those factors discussed in or referred to under the heading “Risk Factors’ in the Company’s Annual Information Form available at http://www.sedar.com, as well as changes in general business and economic conditions, changes in interest and foreign currency rates, the supply and demand for, deliveries of and the level and volatility of prices of rough diamonds, costs of power and diesel, acts of foreign governments and the outcome of legal proceedings, inaccurate geological and recoverability assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalations, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job actions, adverse weather conditions, and unanticipated events relating to health safety and environmental matters).

Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. which speak only as of the date the statements were made, and the Company does not assume any obligations to update or revise them to reflect new events or circumstances, except as required by law. General Notice

Lucara Diamond Corp. (the”Company”) has taken all reasonable care in producing and publishing information contained in this document, and will endeavor to do so regularly. Material in this document may still contain technical or other inaccuracies, omissions, or typographical errors, for which the Company assumes no responsibility. The Company does not warrant or make any representations regarding the use, validity, accuracy, completeness or reliability of any claims, statements or information in this document.

The information contained in this document is for information purposes only. This information does not constitute an offering of securities in any jurisdiction, nor is it intended to supplement nor replace the required disclosures of the Company. The Company’s required disclosures may be found in Canada on www.sedar.com.

The contents of this document have been reviewed and verified by John Armstrong, Ph.D., P. Geol., a mining engineer and Lucara’s VP Mineral Resources and a Qualified Persons pursuant to NI 43-101.

Cautionary Note to U.S. Investors

The United States Securities and Exchange Commission (“SEC”) permits mining companies, in their filing with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this web site, applicable to Canadian NI 43-101 policy, such as “measured,” “indicated,” and “inferred resources,” that the SEC guidelines prohibit.

Exclusion of Liability

The reader agrees to hold Lucara Diamond Corp., its subsidiaries and their directors, officers, employees and agents harmless against claims for damages or costs or loss of any kind arising from access to or use of this document or any information contained in or obtained through herein.

885 W. Georgia StreetSuite 2000

Vancouver, BC Canada V6C 3E8

T 604 689 7842F 604 689 4250lucara@namdo.comlucaradiamond.com

10/10/16