Lucapa Diamond : More Exceptional Diamond Grades at Lulo

Criteria

JORC Code Explanation

Lucapa Commentary

Sampling

techniques

 Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc.) These examples should not be taken as limiting the broad meaning of sampling.

 Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

 Aspects of the determination of mineralisation that are Material to the Public Report. In cases where 'industry standard' work has been done this would be relatively simple (e.g. 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.

 Bulk sample results are reported. The bulk samples were collected from surface excavations using an excavator and trucks. For kimberlite samples overburden of Kalahari sand and Calonda Formation were stripped and weathered kimberlite was exposed. Sample comprised kimberlitic material only. For alluvial samples overburden of Kalahari sand and Calonda Formation sand and silt were stripped and basal Calonda gravel exposed. The gravel + some underlying basement material (

 The sampling is exploratory in nature and generally is seeking to identify diamondiferous lithologies. Samples are relatively large (typically >100m3) and by their nature are representative.

 Diamonds occur in very low concentrations in most lithologies. They also occur as discrete crystal particles and these must be physically separated and recovered to determine grade. Individual diamonds are unique and their value depends on factors including size, shape, colour and clarity. Large samples (tens to hundreds of tonnes) are required to identify the presence of commercial diamonds. Samples in the order of tens of or hundreds of thousands of tonnes are required to establish reliable grade and value

for diamond deposits

Drilling

techniques

 Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face- sampling bit or other type, whether core is oriented and if so, by what method, etc.).

 No drilling is reported in this document.

Drill sample

recovery

 Method of recording and assessing core and chip sample recoveries and results assessed.

 Measures taken to maximise sample recovery

and ensure representative nature of the samples.

 Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

 No drilling is reported in this document

 Sample recovered using an excavator and front- end loader. Sample area visually inspected and all gravels excavated to basement. For kimberlite samples all materials within the sample interval are processed

 No relationship appears to exist between sample recovery and grade. All material within the sampled interval is collected for treatment.

Logging

 Whether core and chip samples have been geologically and geotechnically logged to a level

of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

 Sample pits are lithologically logged and measured to determine volumes.

 Logging is semi-quantitative with edge thicknesses measured of the entire pit. Pits are photographed, but the photography is not systematic.

 Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.

 The total length and percentage of the relevant intersections logged.

 All excavated faces of the pits are logged

Sub-sampling

techniques and sample preparation

 If core, whether cut or sawn and whether quarter, half or all core taken.

 If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.

 For all sample types, the nature, quality and appropriateness of the sample preparation technique.

 Quality control procedures adopted for all sub- sampling stages to maximise representivity of samples.

 Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

 Whether sample sizes are appropriate to the grain size of the material being sampled.

 Not core. No sub-samples are taken. All material excavated is processed to recover diamonds.

 Most of the samples are excavated dry and all material is taken.

 The sampling and sample preparation are identical to those that would be used for mining and are considered appropriate for this type of sampling.

 Samples are disaggregated during excavation and washed through a scrubber. The process is identical to that which would be used for mining and results are considered representative.

 Sample size is appropriate for the material being sampled.

Quality of assay

data and laboratory tests

 The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

 For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

 Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

 Samples are processed though a Dense Media Separation (DMS) plant. Recovery in the size fractions used on the plant is considered total.

 Samples are processed through the Company's DMS Plant to produce a heavy concentrate. Diamonds are recovered from the heavy concentrate using a Flowsort x-ray sorting machine followed by visual sorting.

 DMS efficiency is monitored using density beads

Verification of

sampling and assaying

 The verification of significant intersections by either independent or alternative company personnel.

 The use of twinned holes.

 Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

 Discuss any adjustment to assay data.

 No verification of sample data at an independent facility has been undertaken due to the very large size of the samples and the lack of appropriate facilities in Angola.

 Twinned holes are rarely used because of the size of the sample. In the case of the first significantly diamondiferous samples collected from kimberlite Se251, two pits side by side were used to confirm the presence of diamonds.

 Entry of primary data has been checked and loaded into a sampling spreadsheet.

 Assay data are not adjusted

Location of data

points

 Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

 Specification of the grid system used.

 Quality and adequacy of topographic control.

 Sample sites were located using a hand held

GPS with a nominal accuracy of about 5m.

 The grid system is WGS84 Zone 34L

 Topographic control uses Digital Terrain Models collected during aeromagnetic surveys. In pit measurements are recorded with tape

measures

Data spacing and

distribution

 Data spacing for reporting of Exploration

Results.

 Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

 Whether sample compositing has been applied.

 Data in this report comes from individual pits where all the material from that pit has been, or will be processed.

 The pit spacing is currently related to exploration and is not appropriate for Mineral Resource and Ore Reserve estimation.

 Sample compositing has not been applied

Orientation of

data in relation to geological structure

 Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

 If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

 The samples are considered spot samples within either an alluvial or kimberlitic body.

 Insufficient data exists to determine whether sample bias is present but given the nature of the body, bias is considered unlikely.

Sample security

 The measures taken to ensure sample security.

 Sample stockpiles are located near the company's processing facility and are guarded by armed security personnel at all times.

 Security of processing and diamond recovery is monitored by company and Angolan State Diamond Security personnel.

Audits or reviews

 The results of any audits or reviews of sampling techniques and data.

 The sampling techniques are industry standard and no audits or reviews have been undertaken.

Criteria

JORC Code Explanation

Lucapa Commentary

Mineral

tenement and land tenure status

 Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures,

partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

 The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

 The 1994 legislation covering the Angolan diamond industry stipulates that only ENDIAMA (Empresa Nacional de Diamantes de

Angola, the State Diamond Company) or joint ventures with ENDIAMA, can hold diamond mining rights awarded by the Council of Ministers.

 Under the terms of the Lulo Joint Venture Association Agreements, separate titles are granted for alluvial and kimberlite mining. The exploration for both alluvials and kimberlites on the Lulo Concession is a requirement under the Act.

 The Angolan Government Gazette, dated 24

December 2007, authorized the formation of a Joint Venture for the exercise of prospecting, evaluation and mining of secondary (alluvial) diamond deposits. These rights were granted for a maximum period of five years. Should the Joint Venture wish to extend the agreement beyond five years, then 50% of the Concession would be relinquished. The equity distribution is: ENDIAMA 32%, Lucapa Diamond Company Ltd 40%, Rosas e Petalas S.A. 28%

 In May 2014, the authorization for the kimberlite exploration and mining was gazetted. The equity distribution is: ENDIAMA

51%, Lucapa Diamond Company Ltd 39%*,

Rosas e Petalas S.A. 19% (*This interest will be reduced to 30% after recoupment of the investment.).

 The Joint Ventures Alluvial licence was extended for two years to 25 May 2016. The application to extend Kimberlite Licence for two years until 25 May 2016 was also granted to the concession by the Angolan Ministry of Mines.

 A new 35 year alluvial mining licence was signed on 21 November 2014 creating "Sociedade Mineira Do Lulo, LDA.", an Angolan incorporated company with which Lucapa Diamond Company Ltd has a 40% beneficial interest.

Exploration done by other parties

 Acknowledgment and appraisal of exploration by other parties.

 Limited exploration has been undertaken by state controlled entities.

 Parts of the area have been exploited by artisanal miners - no records of this work are available.

Geology

 Deposit type, geological setting and style of mineralisation.

 Significant diamond bearing alluvial systems,

of Mesozoic to Recent ages overlie a major, but relatively poorly explored, kimberlite field. The kimberlite pipes intrude flat-lying Proterozoic sediments within the Lucapa Graben. The kimberlite field is believed to be the source of the alluvial diamonds.

Drill hole

Information

 A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

o easting and northing of the drill hole collar

o elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar

o dip and azimuth of the hole

o down hole length and interception depth

hole length.

o If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

 No drilling is reported in this document.

 The location of the sample pits is shown on maps within this report. The maps provide data on the location and relative elevations of the samples. The sample pits are surface excavations and other data required in the code is not material and its exclusion does not detract from the understanding of the report.

Data aggregation

methods

 In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.

 Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

 No weighting, averaging, grade truncations or cut-off grades have been used.

 No short or long length aggregation applicable.

 No metal equivalent values are used

 The assumptions used for any reporting of metal equivalent values should be clearly stated.

Relationship

between mineralisation widths and intercept lengths

 These relationships are particularly important in the reporting of Exploration Results.

 If the geometry of the mineralisation with

respect to the drill hole angle is known, its nature should be reported.

 If it is not known and only the down hole lengths are reported, there should be a clear statement

to this effect (e.g. 'down hole length, true width not known').

 Results quoted are from surface pits. For the alluvial sample, the entire gravel horizon was

sampled. For kimberlite samples all material excavated from the pit was processed

 Non-drillhole, in pit sampling, not applicable length concepts.

Diagrams

 Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

 Appropriate map and plans for the reported mineralisation with scale and north points are included with the text of the report.

Balanced

reporting

 Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

 Results reported are complete.

Other

substantive exploration data

 Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

 Previously reported drilling, pitting and bulk sampling data were used to site bulk sample pits. The collar locations of drill holes, exploration pits and bulk samples are shown on diagrams within the report

Further work

 The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).

 Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

 Excavation and processing of material from BLK_28 & BLK_30 is ongoing and results will be reported progressively.

Criteria

JORC Code Explanation

Lucapa Commentary

Indicator

minerals

 Reports of indicator minerals, such as chemically/physically distinctive garnet, ilmenite, chrome spinel and chrome diopside, should be prepared by a suitably qualified laboratory.

 Samples were collected from hand-dug prospecting pits approximately 0.7m deep

 Indicator minerals were concentrated and recovered in the field by hand panning of samples.

 Indicator grains were identified and counted by an experienced Lucapa geologist using a x10

Loupe. Only +1mm indicator minerals were counted.

Source of

diamonds

 Details of the form, shape, size and colour of the diamonds and the nature of the source of diamonds (primary or secondary) including the rock type and geological environment.

 The diamonds reported have a variety of sizes, shapes and colours. The diamonds were recovered from alluvial gravels of the Mid- Cretaceous Calonda conglomerate. These are essentially fanglomerates and braided stream sediments. At Lucapa the primary, kimberlitic source of the diamonds are believed to be kimberlites located within the Lulo Concession.

 As described in the report a number of diamonds were also recovered from surface kimberlite samples

Sample collection

 Type of sample, whether outcrop, boulders, drill core, reverse circulation drill cuttings, gravel, stream sediment or soil, and purpose (e.g. large diameter drilling to establish stones per unit of volume or bulk samples to establish stone size distribution).

 Sample size, distribution and representivity.

 Samples reported are bulk samples of alluvial gravels and weathered kimberlite. The samples are designed to determine whether the units sampled are diamondiferous and to what extent. The samples are also designed to determine stone size distribution and eventually diamond values.

 Lucapa are conducting exploration activities to locate diamondiferous lithologies. The sample size, distribution and representivity are appropriate for this activity

Sample

treatment

 Type of facility, treatment rate, and accreditation.

 Sample size reduction. Bottom screen size, top screen size and re-crush.

 Processes (dense media separation, grease, X- ray, hand-sorting, etc.).

 Process efficiency, tailings auditing and granulometry.

 Laboratory used type of process for micro diamonds and accreditation.

 Samples are processed through Lucapa's DMS plant. The plant uses a 420mm diameter cyclone and has a nominal treatment rate of

150 tonnes per hour. The plant is not accredited.

 Samples are disaggregated during excavation and washed through a scrubber. The bottom screen size is 1.2mm (slotted) and the top size is 32mm.

 The recovery process involves DMS separation, X-ray sorting of the heavy concentrate and hand sorting of the X-ray concentrate. Larger

diamonds are characterised using a ZVI Yehuda

F1000 Colorimeter.

 Lucapa are processing the material through a recently commissioned DMS plant. Processing efficiency has been demonstrated in density bead recovery tests. Tails auditing and granulometry studies have not been completed.

 Microdiamonds are not reported.

Carat

 One fifth (0.2) of a gram (often defined as a metric carat or MC).

 Reported as carats.

Sample grade

 Sample grade in this section of Table 1 is used in the context of carats per units of mass, area or volume.

 The sample grade above the specified lower cut- off sieve size should be reported as carats per dry metric tonne and/or carats per 100 dry metric tonnes. For alluvial deposits, sample grades quoted in carats per square metre or carats per cubic metre are acceptable if accompanied by a volume to weight basis for calculation.

 Sample grade is quoted in the text in units of carats per 100 cubic metres for alluvials.

 A nominal 1.7 tonnes per cubic metre is ascribed to the alluvial gravels and weathered

kimberlite. Limited density measurements

have been made and the use of an "average" density is considered appropriate for the stage of exploration.

 The table in the report reports average carats per stone and carats per unit volume. Stones per cubic metre are not reported but can be calculated from the reported data.

 In addition to general requirements to assess volume and density there is a need to relate stone frequency (stones per cubic metre or tonne) to stone size (carats per stone) to derive sample grade (carats per tonne).

Reporting of

Exploration

Results

 Complete set of sieve data using a standard progression of sieve sizes per facies. Bulk sampling results, global sample grade per facies. Spatial structure analysis and grade distribution. Stone size and number distribution. Sample

head feed and tailings particle granulometry.

 Sample density determination.

 Per cent concentrate and undersize per sample.

 Sample grade with change in bottom cut-off screen size.

 Adjustments made to size distribution for

sample plant performance and performance on a commercial scale.

 If appropriate or employed, geostatistical techniques applied to model stone size, distribution or frequency from size distribution of exploration diamond samples.

 The weight of diamonds may only be omitted from the report when the diamonds are considered too small to be of commercial significance. This lower cut-off size should be stated.

 Exploration results are reported in the text of the report.

 The density for both alluvials and weathered kimberlite samples has been determined at 1.7 tonnes per cubic metre. This number was measured for previous samples and has been applied throughout. An approximation of this sort is considered appropriate for the stage of exploration.

 Percent concentrate and undersize have not been measure and are not considered material to the understanding of this report.

 Variation in grade with changes in bottom cut- off screen size has not been determined. Lucapa's DMS plant is considered to be a pilot plant and plant parameters are the same as would be used on a commercial plant.

 Geostatistical studies have not been undertaken because of the relatively small number of diamonds recovered and uncertainties of using this data for alluvial deposits.

 The total weight of diamonds recovered is reported in the text as are the upper and lower cut-off sizes.

Grade estimation

for reporting Mineral Resources and Ore Reserves

 Description of the sample type and the spatial arrangement of drilling or sampling designed for grade estimation.

 The sample crush size and its relationship to that achievable in a commercial treatment plant.

 Total number of diamonds greater than the specified and reported lower cut-off sieve size.

 Total weight of diamonds greater than the specified and reported lower cut-off sieve size.

 The sample grade above the specified lower cut- off sieve size.

 No Mineral Resources or Ore Reserves are included in the report

Value estimation

 Valuations should not be reported for samples of diamonds processed using total liberation method, which is commonly used for processing exploration samples.

 To the extent that such information is not deemed commercially sensitive, Public Reports should include:

o diamonds quantities by appropriate screen size per facies or depth.

o details of parcel valued.

o number of stones, carats, lower size cut-off

per facies or depth.

 The average $/carat and $/tonne value at the selected bottom cut-off should be reported in US

 Value estimates are based on recoveries from a commercial scale DMS plant. Total liberation methods have not been employed.

 Much of the detailed diamond valuation data is considered commercially sensitive and the independent valuer, Jaguar Pty Ltd has not allowed details of the valuation to be released.

 Broad details of the parcel valued are included in the text.

 The parcel of diamonds sold includes all diamond held by Lucapa at the time the valuation was undertaken (February 2014).

 The bottom cut-off used is the same as the plant - 1.2 mm slotted screen.

Dollars. The value per carat is of critical

importance in demonstrating project value.

 The basis for the price (e.g. dealer buying price, dealer selling price, etc.).

 An assessment of diamond breakage.

 Values are reported in US and Australian

Dollars.

 The price quoted is the sale price.

 No significant diamond breakage was recognised.

Security and

integrity

 Accredited process audit.

 Whether samples were sealed after excavation.

 Valuer location, escort, delivery, cleaning losses, reconciliation with recorded sample carats and number of stones.

 Core samples washed prior to treatment for micro diamonds.

 Audit samples treated at alternative facility.

 Results of tailings checks.

 Recovery of tracer monitors used in sampling and treatment.

 Geophysical (logged) density and particle density.

 Cross validation of sample weights, wet and dry, with hole volume and density, moisture factor.

 There has been no accredited process audit.

 Samples were monitored by armed guards after excavation and the process operation was monitored by Angolan State Diamond Security personnel.

 Diamonds recovered are stored in a locked vault and retained on site. The diamonds have not

yet been cleaned or valued.

 Microdiamonds were not processed

 No audit samples were collected because of the size of the bulk samples.

 Tailings have not been checked.

 Tracer monitors were used in sample treatment with tracer recovery in all tested size fractions

>95% for tracers of density 3.5 g/cc

 Geophysical densities were not determined.

 Gross validation of weights with hole volume and density is not considered appropriate for the stage of exploration

Classification

 In addition to general requirements to assess volume and density there is a need to relate stone frequency (stones per cubic metre or tonne) to stone size (carats per stone) to derive grade (carats per tonne). The elements of uncertainty in these estimates should be considered, and classification developed accordingly.

 Insufficient diamonds have been recovered to allow Lucapa to quantify the uncertainty in stone frequency, stone size or diamond grade, as yet.