Ann: Quarterly Activities Report-LOM.AX, page-24

Lucapa Diamond - The course for further growth are found

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The Australian Lucapa Diamond Company (WKN A0M6U8 / ASX LOM) has a active and successful June quarter behind. The alluvial diamond production is progressing and now the company also devotes increasingly looking for the primary source of exceptionally large diamonds, which are found on the Lulo concession in Angola in large numbers.

So the company of CEO Stephen Wetherall sold in the three months to the end of June - on the newly formed joint venture company Sociedade Mineira do Lulo (SML) - diamonds weighing a total of 2.670 carats and it raised gross proceeds of 4.1 million . AUD. This represents an average price of high 1,546 AUD or $ 1,132 per carat.

In the first half 2016 Lucapa scored so gross proceeds of 36.6 million AUD (26.2 million USD), at an average price of 7,960 AUD or $ 5,686 per carat, which underlines the outstanding quality of the stones recovered at the Lulo concession , Taking the the 404-carat stone, the Lucapa discovered in February, reached out 22.5 million AUD, is the average price per carat still at exceptionally high 3,374 AUD or $ 2,421 per carat. In September quarter expected Lucapa and its partners in order to make at least two more diamond sales. On June 30, the company still unsold diamonds had from 1,219 carats in inventory.

The alluvial mining, from which these stones were collected, concentrated in the quarter due to the rainy season in Angola in the mining area block 6 while carried significant test mining in the area E46. Towards the end of the quarter Lucapa was then access to the mining area Block 8, where they had discovered the 404-CARAT in the previous quarter. Given the productivity of these areas to Lucapa will concentrate on the dismantling of Block 8 and Block 6 in the current quarter.

At the above table reveals which has experienced significant appreciation of alluvial mining on Lulo through investments in new Erdarbeitsgeräte in the second half, 2015. This had allowed the company to the degradation capacity of more than 20,000 cubic meter increase per month - during the dry season. The degradation capacity during normal rainy season is on average 12,000 cubic meters per month. Nevertheless led Lucapas strategy to deliver quality instead of quantity means that revenues of 36.3 million AUD could be achieved during the rainy season.

Total 36 753 cubic meter alluvial gravel were processed in the processing plant of the project in June quarter, which represents an increase of 113% compared to the throughput of the prior-year quarter.

were won in the quarter diamonds with a total of 2,581 carats, including 30 "special" stones up to 88 carats and a 13karätiger yellow diamond. This represents an increase in the recovery of 80% compared to the second quarter, 2015. At the same time the average size of the diamonds mined increased from 0.8 to 1.3 carats.

In addition to the alluvial mining to Lucapa is also dedicated to Kimberlitexploration on Lulo, so finding the original source of all the exceptional diamonds that have been discovered so far. Previously Lucapa and its joint venture partners have discovered on the Lulo concession 300 Kimberlitziele, of which approximately 100 were classified as proven or probable kimberlite and identified five diamond-bearing kimberlite pipes as.

The area around the blocks 8 and 6 is still the focus of Kimberlitexploration after Electromagnetic and Gravitätsuntersuchungen, which were carried out in the last quarter on the target L259, successfully identified a 78-108-hectare body of the lying near the surface impression a Kimberlitschlots - or its crater - matches.

L259 is below Block 8 and the closer of Block 6 where Lucapa has repeatedly found large, high quality diamonds. Towards the end of last quarter, a Kimberlitbohrprogramm was taken after the specialist team arrived a little late.

So far, it has ten drilling locations prepared for drilling at L259 with which the holes are to begin. The drill program is to the rest of the year will continue on and concentrate on the most promising targets. More destinations near L259 are L13, L15, L248 and E217. The diamond-bearing kimberlite L19 and L46 and the obvious kimberlite L18 will also be drilled.

Regarding the alluvial mining Lucapa has invested additional capital to upgrade and improve the operation and the plant on Lulo. Thus, the degradation capacity is further increased and the diamond mining increased - to discover in particular the potential diamonds of over 295 carats

During the quarter, 48.3 million options to 30 Australian cents also converted before it expired on 29 April. It Lucapa flowed to AUD 14.5 million in cash, which further strengthened the balance sheet. After the above-mentioned investments, which included 8.4 million AUD, Lucapa decreed so late in the quarter about 14.4 million AUD. This does not include the 2.7 million AUD and cash equivalents, on the charge of the alluvial mining joint venture company SML disposal (40% Lucapa) 30 June.

Overall Lucapa has asked our opinion in the past quarter with the expansion of alluvial production capacity and improving the systems the way for a more profitable future. Moreover, it is now becoming the primary source of so found diamonds with Kimberlitbohrprogramm ever closer, even if it only once "only" material should be identified for large samples. Here is our opinion after the Blue sky potential of the stock. Because you should really discover the first new, economically viable diamond mine for a long time, the stock is advancing into completely new dimensions with safety.

And Lucapa has recently even a second iron in the fire! The Orapa Area F project is a 16.2 square kilometer exploration license that the Orapa diamond mine in Botswana and in only 4 kilometer distance to the kimberlite BK02 is located 40km east and on the Canadian Lucara Diamond (WKN A0MYR8) currently takes large samples. The area includes two known kimberlites and a larger magnetic anomaly. A bill adopted recently work program for Orapa Area F includes geophysical Gravitätsuntersuchungen followed by the extraction of geochemical soil samples.