Lucapa Diamond Company Ltd is acquiring a 70% interest in the advanced Mothae Kimberlite Project in Lesotho for $9 million. Mothae is located near the high-value Letšeng mine and has historically produced large, high-quality diamonds from bulk sampling. Lucapa plans a staged development starting with a $12 million phase 1 to modify the existing plant and mine over 2 million tonnes in the first 3 years. The acquisition diversifies Lucapa's production and is expected to be value accretive based on a preliminary assessment.

1. Page 1 of 11
Lucapa Diamond Company Ltd (LOM)
Diamond:Producer/Explorer
Price Target: $0.77
Brief Business Description
Hartleys Brief Investment Conclusion
Issued Capital
- fully diluted
- ITM diluted 381.1m
Market Cap
- fully diluted
- ITM diluted
Cash -est *
Debt -est $0.0m
EV
- fully diluted
Projects
Lulo, Angola Diamonds
Mothae, Lesotho Diamonds
Orapa Area F, Botswana Diamonds
Brooking, Australia Diamonds
Board & Management
Miles Kennedy (Non-Exec Chairman)
Stephen Wetherall (CEO/MD)
Gordon Gilchrist (Non-Exec Director)
Albert Thamm (Non-Exec Director)
Nick Selby (COO)
Top Shareholders
Carrington Corporate Pty Ltd 6.0%
Company Address
Author:
Mike Millikan
Resources Analyst
Ph: +61 8 9268 2805
E: mike_millikan@hartleys.com.au
34 Bagot Road
Subiaco WA 6008
384.0m
$121.9m
325.0m
$144.0m
$5.7m
$116.1m
$125.3m
* excludes cash in the Lulo JV account (~US$14m),
or diamond inventories
LOM.asx
Speculative Buy
3 Feb 2017
Alluvial diamond mining in Angola, continues
to recover exceptional value stones.
Significant diamond-bearing kimberlite
potential. Highly experienced Board and
Management. New advanced kimberlite
project being acquired in Lesotho.
Share Price (last): $0.375
Diamond producer and explorer
$142.9m
LUCAPA DIAMOND COMPANY LTD (LOM)
Acquires the Advanced Mothae Kimberlite Project
Lucapa (LOM) is diversifying its diamond production capability through the
acquisition of an advanced kimberlite project (Mothae) in the Kingdom of
Lesotho, Southern Africa.
The project acquisition is seen as a complimentary fit to the Lulo diamond
mine (Angola) due to the very high-value diamond content of the kimberlite,
which contains over 1 million carats (Mcts) of diamonds. The acquisition price
of US$9m, for 70% interest (Lesotho Government 30%) is payable over a 10
month period, funded from existing cash, anticipated distributions from the
Lulo alluvial diamond operation, and/or ITM options, or other funding sources.
Great Address for Large, High-end Diamonds
The project is considered of high-quality and well located 5kms from Gem
Diamonds’ Letšeng mine (~5Mcts), which is the highest average dollar per
carat kimberlite diamond mine in the world. Some of the famous Letšeng
diamonds includes the 603ct Lesotho Promise, which sold for US$12.4m in
2006 and the 478ct Light of Letšeng which sold for US$18.4m in 2008.
Interesting to note, Gem Diamonds paid ~US$119m for Letšeng in late 2006.
The Mothae kimberlite pipe has a surface area of ~9Ha (about half the size
of the Main Pipe at Letšeng), and is contained within a new 10 year mining
lease which LOM has the right to extend for another 10 years. The pipe
extends from surface and is expected to translate to a low strip ratio (<1.5:1)
open pit operation. Typical of other kimberlite pipes within the region, Mothae
is low grade (~2.7cpht) but contains large, high value diamonds.
The project contains existing infrastructure (historical US$36m spend)
including a camp, processing plant (needs refurbishment), diesel-gen power,
fresh water, and TSF. Previous bulk sampling at Mothae recovered rare Type
IIa diamonds including a stone up to 56.5cts in size which sold for ~US$1.7m.
Historically from the ~600,000t of kimberlite extracted for bulk sampling, over
23,000cts of diamonds were recovered (grade ~3.9cpht) providing average
price per carat values for the resource well in excess of US$1,000/ct.
Staged Development Strategy – Phase 1 Capital Light
Lucapa is targeting a staged development strategy, which has potential to see
first production within 12 months. The initial low capex (~US$12m) Phase 1
design is to modify and use the existing diamond plant to process over 2Mt of
weathered kimberlite to recover over 50,000cts of diamonds over a 3 year
period. At the planned throughput rate of 720Ktpa over 17,000cts per annum
could provide operating margins of +US$9m, for payback within 18 months.
The larger Phase 2 expansion for operational scale of 2Mtpa could produce
over 40,000cts of diamonds per annum with potential to more than double
operating margins, but requires Scoping and Feasibility Studies.
Improved Price Target to 77cps; Speculative Buy
Next steps for Lucapa include completing conditions precedent, converting
resources to JORC 2012, an environmental assessment, engaging
contractors for plant design/build, and mining; and establishing a marketing
channel for the diamonds.
We maintain our Speculative Buy recommendation, with an updated price
target of 77cps, improved by the acquisition of the Mothae Kimberlite Project,
which appears value accretive on our preliminary assessment.
Hartleys Limited ABN 33 104 195 057 (AFSL 230052) 141 St Georges Terrace, Perth, Western Australia, 6000
Hartleys does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the
firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision. Further information concerning Hartleys’ regulatory disclosures can be found on Hartleys
website www.hartleys.com.au
0.00
0.10
0.20
0.30
0.40
0.50
0.60
.
2.
4.
6.
8.
10.
12.
14.
16.
18.
Feb-17Oct-16Jun-16Feb-16
Volume - RHS
LOM Shareprice - LHS
Sector (S&P/ASX SMALL RESOURCES) - LHS
A$ M
Lucapa Diamond Ltd
Source: IRESS

2. Hartleys Limited Lucapa Diamond Ltd (LOM) 3 February 2017
Page 2 of 11
SUMMARY MODEL
Lucapa Diamond Company Ltd Share Price Feb-17
LOM $0.375 Speculative Buy
Directors and Key Management Company Details
Share Price $0.375 Miles Kennedy (Non-Exec Chairman) 34 Bagot Road
Market Capitalisation $121.9m Stephen Wetherall (CEO/MD) Subiaco WA 6008
Cash $5.7m Gordon Gilchrist (Non-Exec Director) +61 8 9381 5995
Debt $0.0m Albert Thamm (Non-Exec Director)
Net Cash (Debt) $5.7m Nick Selby (COO) www.lucapa.com.au
Issued Capital 325.0m Johan van Wyk (Finance Manager)
Issued Capital (fully diluted ITM options) 381.1m Mark Drummond (Investor Relations)
Options 59.07m @ A$0.22
Issued Capital (fully diluted all options) 384.0m Top Shareholders (est) m shs %
EV $116.1m Carrington Corporate Pty Ltd 19.58 6.0%
Valuation & Price Target $0.77 Board and Management 2.45 0.8%
Projects Interest Location
Lulo - Alluvial * 40% Angola
Lulo - Kimberlite ** 39% Angola
Orapa Area F 75%/100% Botswana
Brooking 80% Australia
Mothae Kimberlite*** 70% Lesotho New advanced kimberlite project acquired in Lesotho.
* JV Partners interest: Endiama 32% and Rosas & Petalas 28%
Project
Q1 CY15 Lulo (A)
Resources Vol m3 Grade cphm3 Carats Attr. Q3 CY15 Lulo (A)
Q4 CY15 Lulo (A)
Diamonds Q1 CY16 Lulo (K)
Alluvials - 2015 Inf 550,200 9.27 51,000 20,400 Q1 CY16 Lulo (A)
Sector - 5 10,400 10.58 1,100 440 Incorporates Lulo alluvial mining company (SML) Q2 CY16 Lulo (A)
Sector - 4 17,699 90.09 1,800 720 Q2 CY16 Lulo (K)
Sector - 5N 51,200 6.66 3,400 1,360 Installs wet frontend on the diamond plant Q2 CY16 Lulo (A)
Sector - 4 MB08 120,001 8.23 9,700 3,880 Installs XRT large diamond recovery on plant Q3/Q4 CY16 Lulo (A)
Sector - 46 132,700 17.63 23,400 9,360 Deep boiling facility installed Q4 CY16 Lulo (A)
Sector - 1 218,200 5.36 11,700 4,680 Ongoing kimberlite testing Q4 CY16 Lulo (K)
Kimberlite - 2013 Ind 2.4Mt 3.00 65,000 45,500 Acquires Mothae Kimberlite Project Q1 CY17 Mothae (K)
Inf 36.6Mt 2.70 1,000,000 700,000 Update JORC resource - alluvials Q1 CY17 Lulo (A)
T 38.9Mt 2.70 1,065,000 745,500 Update JORC resource - kimberlite Q1 CY17 Mothae (K)
* Modelling excludes Special Stones Ongoing kimberlite drill-testing Q1/Q2 CY17 Lulo (K)
Mothae FS - Phase 2 CY17 Mothae (K)
P&L FY2013A FY2014A FY2015A H1 2016A Final payment due for Mothae Kimberlite Q4 CY17 Mothae (K)
A$ A$ A$ *US$
Net Revenue - - - 6.3 Unpaid Capital No (m) $ (m) Ave Pr % Ord
Total Costs (1.2) (2.6) (3.6) (3.0)
EBITDA (1.2) (2.6) (3.6) 3.2 Options/Performance Rights
Deprec/Amort (0.0) (0.0) (0.0) (0.0) 31-Dec-17 Options 53.8 11.5 0.21 17%
EBIT (1.2) (2.6) (3.6) 3.2 31-Dec-18 0.0 0.0 0.00 0%
Net Interest 0.0 0.0 0.0 0.0 31-Dec-19 Options/Rights 5.3 1.6 0.29 2%
Pre-Tax Profit (1.2) (2.6) (3.6) 3.25 Total 59.1 13.0 0.22 18%
Tax Expense - - - -
NPAT (1.2) (2.6) (3.6) 3.25
Abnormal Items - - - -
Reported Profit (1.2) (2.6) (3.6) 3.25
Analyst: Mike Millikan
Phone: +61 8 9268 2805
Sources: IRESS, Company Information, Hartleys Research
Kimberlite target L259 exploration drilling starts
Maiden JORC alluvial resource
Key Market Information
Investment Summary
Ramping up alluvial production and increasing kimberlite exploration.
Alluvial diamond mining in Angola, continues to recover exceptional
high-value stones ("Specials"). Significant diamond-bearing kimberlite potential.
Ramp-up 10,000bcm to 20,000bcm
Diamonds
"4th February Stone" 404ct gem - sold ~A$22.5m
Last Updated: 03/02/2017
Commodity
Alluvial operation to generate cashflows to fund kimberlite exploration. Exceptional
quality diamonds and indicator minerals from mining block 8, 6, 46 indicative of a
proximal (high value) primary source(s).
Diamonds
Key Milestones/Newsflow
Comments
L259 exploration gravity/EM
Highly experienced management, with strong diamond skillsets.
* Changed functional currency from AUD to USD
*** JV Partners interest: Government of Lesotho 30%
Diamonds
Financial Years are Calendar Years
** JV Partners interest: Endiama 51% and Rosas & Petalas 10%
Diamonds
Diamonds
Alluvial Mining Commenced

3. Hartleys Limited Lucapa Diamonds Ltd (LOM) 3 February 2017
Page 3 of 11
MOTHAE DIAMOND PROJECT - LESOTHO
ADVANCED QUALITY KIMBERLITE
Lucapa has entered into an agreement to acquire a 70% interest in the Mothae
Kimberlite Project located in the north-eastern part of Lesotho, Southern Africa. The
government of Lesotho (GOL) will hold the balance 30% interest (free-carried).
The acquisition has a staged cash consideration for US$9m consisting of:
 US$0.4m deposit to GOL upon execution of documents
 US$4.1m within 60 days; and
 US$4.5m payable in equal instalments over the following 8 months.
The transaction remains subject to conditions precedent of ASX and other regulatory
approvals, the issue of a new 10 year mining licence and the payment of the cash
consideration (as above).
Fig. 1: Mothae Project Location - Lesotho
Source: GIA
The Mothae project area spans ~47km2 and includes a ~26km2 protection area,
located 5kms from Gem Diamonds’ Letšeng mine (~5Mcts), which is the highest
average dollar per carat kimberlite diamond mine in the world.
The Mothae kimberlite pipe has a surface area of 8.8Ha, consisting of a main South
Lobe and smaller North Lobe. The pipe extends from surface and is expected to
translate to a low strip ratio (<1.5:1) open pit operation. Like the other kimberlite pipes
within the region, Mothae is low grade (~2.7cpht) but contains large, high value
diamonds.
Lucapa is diversifying
its diamond production
capability through the
acquisition of the
advanced Mothae
Kimberlite Project in
Lesotho, Southern
Africa
The acquisition price
of US$9m, for 70%
interest (Lesotho
Government 30%) is
payable over a 10
month period
Lesotho is a diamond
rich country, with a
long history in mining
Lesotho has a 25%
tax rate and 5%
diamond royalty
The Mothae kimberlite
pipe has a surface
area of 8.8Ha, and
like the other
kimberlite pipes within
the region, is low
grade (~2.7cpht) but
contains large, high
value diamonds

4. Hartleys Limited Lucapa Diamonds Ltd (LOM) 3 February 2017
Page 4 of 11
The project contains existing infrastructure including an accommodation camp, site
offices, diamond processing plant (needs refurbishment), diesel-gen power, fresh
water supply (dams), and tailings storage facility (TSF).
Fig. 2: Mothae Project Site Location
Source: Lucapa Diamonds Company Limited
Previous bulk sampling at Mothae recovered rare Type IIa diamonds including a
56.5cts diamond which sold for ~US$1.7m. Historically from the ~600,000t of
kimberlite extracted for bulk sampling, over 23,000cts of diamonds have been
recovered (grade ~3.9cpht) providing average ROM diamond prices well in excess of
US$1,000/ct.
Fig. 3: Mothae High-value Diamonds
Source: Lucapa Diamonds Company Limited
Previous trial mining
and bulk sampling
recovered some
23,000cts of diamonds
with close to 100
stones weighing more
than 10cts
Some of the larger
recovered diamonds,
with a rare Type IIa
+50cts stone selling
for US$1.7m

5. Hartleys Limited Lucapa Diamonds Ltd (LOM) 3 February 2017
Page 5 of 11
Phased Development Plan for Mothae
Lucapa is targeting a staged development strategy, which has potential to see first
production within 12 months.
The initial Phase 1 development strategy is expected to be low capex (~US$12m) and
plans to modify and use the existing diamond plant to process over 2Mt of weathered
kimberlite for the recovery of over 50,000cts of diamonds over a 3 year period. At the
planned throughput rate of 720Ktpa, over 17,000cts per annum could provide
operating margins of +US$9m, for estimated payback within 18 months.
The larger Phase 2 development plan is for operational scale of 2Mtpa producing over
40,000cts of diamonds per annum. At these production levels operating margins
should more than double subject to favourable Scoping and Feasibility Studies.
Fig. 4: Lucapa current Development Strategy
Source: Lucapa Diamond Company Ltd
Kimberlite Mines of Lesotho
Diamond mines are in close proximity to the Mothea kimberlite, include Gem
Diamonds’ Letšeng mine which is in production (+100Kcts pa), and Firestone’s
Liqhobong mine which is in the final stages of development and expected to reach first
production (+1Mcts pa) before the end of CY17.
Fig. 5: Diamond Peers Operating in Lesotho
Source: Company Reports
Company
Market Cap
(US$m Eq)
Lesotho
Kimberlite
Interest
Size
(Ha)
Resource
(Mt)
Grade
(cpht)
Diamonds
(Mcts)
Price
US$/ct
Insitu
Value
US$m
Market
Cap/Insitu
Value
Gem Diamonds Limited 221.9 Letseng 70% 17.2 285.1 1.8 4.95 2,094 10,365.3 2.1
Firestone Diamonds PLC 200.3 Liqhobong 75% 8.5 83.4 28.0 23.1 132 3,049.2 6.6
Lucapa Diamonds Company Ltd 105.4 Mothae 70% 8.8 39.0 2.7 1.06 1,073 1,137.4 9.3
Phased development
strategy includes a
low capital start-up
which could see
production within 12
months
Current resource is
expected to be
converted to a JORC
2012 resource before
the end of the MarQ
CY17

6. Hartleys Limited Lucapa Diamonds Ltd (LOM) 3 February 2017
Page 6 of 11
LULO DIAMOND PROJECT - ANGOLA
HIGH-VALUE “SPECIAL” DIAMONDS
Lucapa also holds the Lulo diamond concession in joint venture (JV) with Angolan
government’s Endiama and local partner Rosas and Petalas, located in the Lunda
Norte province. Under the current JV framework, Lucapa is the operator with a 40%
interest in the alluvials and holds a 39% interest in kimberlites. Lucapa’s interest in
both alluvials and kimberlites has the potential to be increased through pre-emptive
rights with the local partner and through government initiatives. Alluvial diamond
mining commenced at Lulo in January 2015.
Fig. 6: Lulo Project Location and Licence Concession
Source: Lucapa Diamond Company Ltd
Lulo Alluvial Production Hit Record Levels in CY16
Lucapa and its JV partners continue to improve and enhance the alluvial diamond
mining operations at Lulo. The new X-ray transmissive sorting circuit (XRT) is now
commissioned, providing capacity to recover individual diamonds up to 1,000cts in
size. In addition, the investment in earthmoving equipment has lifted mining volumes
and the revamped wet frontend reducing processing bottlenecks and provided better
diamond liberation.
Lucapa produced 5,313 carats of alluvials diamonds in the DecQ to lift CY16
production to a record 19,833 carats (up 136% from 8,394 carats in CY15). Over
50,000m3 of alluvials were treated during the quarter at a good recovered grade of
10.5cphm3. The total recovered grade for CY16 was 10.5cphm3, up 40% on CY15 with
an additional ~76,780m3 (or 68%) of alluvial material processed in CY16.
Fig. 7: Lulo Alluvial Production – Volumes, Grade (LHS) & Diamonds Recovered (RHS)
Source: Lucapa Diamond Company Ltd; Hartleys Research
10.3
8.3
7.9
5.6
8.3
7.0
13.7
10.6
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Q1CY15
Q2CY15
Q3CY15
Q4CY15
Q1CY16
Q2CY16
Q3CY16
Q4CY16
Grade(cts/100bcm)
VolumeTreated(bcm)
Lulo Alluvial Diamond Production - Volume Treated and Grade
12
3
43
28
23 30
137
79
-20
0
20
40
60
80
100
120
140
160
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Q1CY15
Q2CY15
Q3CY15
Q4CY15
Q1CY16
Q2CY16
Q3CY16
Q4CY16
SpecialDiamonds(numbers)
DiamondsRecovered(cts)
Lulo Alluvial Diamond Production - Diamonds Recovered and Specials
Under the current JV
framework, Lucapa is
the operator with a
40% interest in the
alluvials and holds a
39% interest in
kimberlites
3,000km2 concession
in Angola
Angola is the 5th
largest diamond
producing nation
Alluvial production
volumes above the
20,000m3 per month is
achievable and can be
increase further as
more mining pits are
excavated
An updated JORC
resource for the
alluvials expected in
the MarQ CY17

7. Hartleys Limited Lucapa Diamonds Ltd (LOM) 3 February 2017
Page 7 of 11
Lucapa recently received gross sales revenues of ~A$19.2m in the DecQ, from two
diamond sales (4,677cts). Total CY16 sales of A$69.5m is up an impressive 443% on
CY15 results of A$12.8m with diamond production up 84% yoy and received diamond
price per carat up 196% to A$4,059/ct (US$2,983/ct). More diamond sales are
anticipated in CY17 as production is sustained at the current levels and likely
increased during the drier months.
Fig. 8: Alluvial Production – Diamond Sales
Source: Lucapa Diamond Company Ltd; Hartleys Research
Kimberlite Exploration Drilling Being Accelerated at Lulo
The alluvial operation continues to generate good free cash for expansions, and for
reinvestment into diamondiferous kimberlite exploration.
Kimberlite crater facies infill material has been intersected in drilling the L248 target,
located between mining block 8 and 6, which is highly encouraging and requires
follow-up.
Drilling is ongoing at the large L259 kimberlite target (~100Ha), previously considered
the potential primary source for the high-quality alluvial diamonds being mined from
mining block 8 and 6. During the DecQ a total of 26 shallow holes to depths of ~35m
were completed, with reports of “no visible volcaniclastic material identified”, but
deeper drilling is needed.
Drill-testing of target L18, located ~6kms from the L259 kimberlite target intersected
near-surface kimberlite material in 4 holes, with further follow-up work proposed.
Weathered kimberlite has also been reported in the L171 target, located to the south
of the current alluvial mining area. Further drilling is proposed, but subject to drier
ground conditions.
Drilling and bulk sampling are considered the definitive test to ultimately determine
diamond content for resource potential and overall grade. To expedite this process, a
larger drill rig has also been ordered to accelerate drilling and to enable deeper and
wider diameter drill-testing. A second drill rig arrived on site late CY16, with a third drill
rig to commence drilling before the end of the MarQ CY17
3,778 9,327 1,931 2,670 7,837 4,677 17,115
8.1
12.8
32.5
4.1
13.6
19.2
69.5
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Q4CY15
FY15
Q1CY16
Q2CY16
Q3CY16
Q4CY16
FY16
GrossRevenue(A$m)
DiamondParcel(cts) Lulo - Diamond Sales
The number of special
diamonds (>10.8cts)
increased significantly
in H2 CY16, with ~216
recovered
Diamonds sales in
CY16 have generated
gross revenues of
~A$69.5m
Kimberlite exploration
at Lulo is now being
accelerated
The potential size
(~100ha) of the L259
kimberlite target is
considered significant,
especially if deemed
to be diamondiferous
Angola’s largest
diamond mine (4th
largest globally) is
Catoca, which
produces circa 6.5
million carats per
annum from a pipe
within a surface area
of ~64Ha

8. Hartleys Limited Lucapa Diamonds Ltd (LOM) 3 February 2017
Page 8 of 11
Fig. 9: Kimberlite Drill Targets at Lulo
Source: Lucapa Diamond Company Ltd

9. Hartleys Limited Lucapa Diamonds Ltd (LOM) 3 February 2017
Page 9 of 11
VALUATION AND PRICE TARGET
METHODOLOGY
The estimation of alluvial diamond resources and reserves can be problematic due to
the variable distribution of the diamonds within the gravel host. Lucapa has an
independent JORC-compliant resource estimate for the alluvials at Lulo which we
expect will continue to grow over time. With a few hundred kimberlites within the
immediate catchment area eroding over a long time period provides some comfort that
mining can be sustained at the targeted levels over a number of years.
In our preliminary valuation, which forms our price target, we model a base case 6
year alluvial operation at Lulo. A new resource after mine depletion is expected to be
released in the coming months (early CY17). When assessing diamond deposits,
tonnes, grade, and the average value of the diamonds ($/carat) must be determined.
Diamonds, unlike commodities such as gold, do not have a set value, with their value
($/ct) depending on their size, quality and other key characteristics under the 4Cs. The
project also has a higher than average price per carat which again is difficult to model,
especially the recovery rate of the “Special” >10.8 carat stones and frequency of highly
prized Type IIa stones. The actual average sale price received to date is just over
A$4,000/ct (~US$3,000/ct). We use a basic A$2,000/ct pricing in our modelling, which
is considered conservative.
Our basic preliminary modelling uses the following assumptions for the alluvials:
 Processing rate of 20,000m3 potential to increase to 30,000m3/month
 Grade of range 9-10cts/100m3
 Production (annualised) of +20,000cts
We assume surplus funds will be used for working capital, dividend returns
(distributions) and kimberlite exploration.
Our preliminary Mothae valuation assumes the transaction completes and both Phase
1 and 2 developments can be successfully funded into production. We stress our
valuation is highly speculative at this stage. Our updated price target of 77cps is
derived from both a discounted cashflow analysis of the current Lulo alluvial operation,
perception of exploration value in the search of primary diamond sources (which we
regard as high) and Mothae Kimberlite development.
Fig. 10: Hartleys LOM Price Target
Source: Hartleys Research
Share Price Valuation (NAV) Risked Est. A$m Est. A$/share
Lulo Alluvials - NPV@12% - 6 year mine life (Base Case) $139.5 $0.37
Lulo Kimberlite Potential - risked $73.4 $0.19
Mothae Kimberlite - NPV@14% - Phase 1 $13.2 $0.03
Mothae Kimberlite - NPV@14% - Phase 2 $60.8 $0.16
Other Exploration $15.0 $0.04
Corporate Overheads -$28.1 -$0.07
Net Cash (Debt) $5.7 $0.02
Options and Other Equity $13.0 $0.03
Total $292.6 $0.77
We will continue to
update our modelling
from Company
released information
and actual production
results
Latest price target of
77cps

10. Hartleys Limited Lucapa Diamonds Ltd (LOM) 3 February 2017
Page 10 of 11
RISKS
Key risks for Lucapa Diamonds include establishing resources (exploration target)
which can be converted for mine life growth, improving balance sheet to fund ongoing
exploration activities and managing movement in diamond prices and exchange rates.
Fig. 11:Key Risks
Assumption
Risk of not realising
assumption
Downside risk to share
price if assumption is
incorrect
Comment
Mothae Kimberlite
acquisition completes
Low Meaningful The 70% project stake is subject to the payment of
US$9m over 10 months and new mining licences
being in place.
Stable governments Low-Med Extreme Angola has had a long history of civil unrest but
has been stable for over 10 years with a freely
elected government, last election in 2012.
Licences are fully incorporated and recently
renewed. Lesotho is a very stable African country.
Model parameters for our
LOM valuation
Med Meaningful We have made a number of large assumptions in
our LOM preliminary valuation, based on past
Company performance, forecast production
profiles and an indicative mine life. Any changes to
these assumptions have both upside and
downside risks.
Favourable diamond prices Med Meaningful LOM remains highly sensitive to changes in
commodity prices (diamond), exchange rates and
market sentiment. The Company operates a high-
value alluvial mine which recovers higher than
normal special stones for higher than average per
carat prices. The pricing of the diamond market is
largely opaque and relies on supply and demand
fundamentals and luxury item consumption. The
Company is not immune to market sentiment.
Upside from exploration Med Moderate Positive returns from the alluvial operation are
expected to be reinvested into the search for the
ultimate prize diamond-bearing kimberlites.
Exploration in and around mining block 8 has a
number of kimberlite targets within the catchment
area which could be the primary source for the
high-value stones recovered in the alluvial gravels.
If a diamond-bearing kimberlite can be identified
as the source for these diamonds, then LOM has
significant upside potential. However, the lack of
exploration success would have a negative impact
on the Company.
Conclusion At this stage we consider the assumptions have a medium risk of not being achieved.
Source: Hartleys Research

11. Page 11 of 11
HARTLEYS CORPORATE DIRECTORY
Research
Trent Barnett Head of Research +61 8 9268 3052
Mike Millikan Resources Analyst +61 8 9268 2805
John Macdonald Resources Analyst +61 8 9268 3020
Paul Howard Resources Analyst +61 8 9268 3045
Aiden Bradley Research Analyst +61 8 9268 2876
Michael Scantlebury Junior Analyst +61 8 9268 2837
Janine Bell Research Assistant +61 8 9268 2831
Corporate Finance
Dale Bryan Director & Head of
Corp Fin.
+61 8 9268 2829
Richard Simpson Director +61 8 9268 2824
Paul Fryer Director +61 8 9268 2819
Ben Wale Associate Director +61 8 9268 3055
Ben Crossing Associate Director +61 8 9268 3047
Stephen Kite Associate Director +61 8 9268 3050
Scott Weir Associate Director +61 8 9268 2821
Rhys Simpson Manager +61 8 9268 2851
Registered Office
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Australia Perth WA 6001
PH:+61 8 9268 2888 FX: +61 8 9268 2800
www.hartleys.com.au info@hartleys.com.au
Note: personal email addresses of company employees are
structured in the following
manner:firstname_lastname@hartleys.com.au
Hartleys Recommendation Categories
Buy Share price appreciation anticipated.
Accumulate Share price appreciation anticipated but the risk/reward is
not as attractive as a “Buy”. Alternatively, for the share
price to rise it may be contingent on the outcome of an
uncertain or distant event. Analyst will often indicate a
price level at which it may become a “Buy”.
Neutral Take no action. Upside & downside risk/reward is evenly
balanced.
Reduce /
Take profits
It is anticipated to be unlikely that there will be gains over
the investment time horizon but there is a possibility of
some price weakness over that period.
Sell Significant price depreciation anticipated.
No Rating No recommendation.
Speculative
Buy
Share price could be volatile. While it is anticipated that,
on a risk/reward basis, an investment is attractive, there
is at least one identifiable risk that has a meaningful
possibility of occurring, which, if it did occur, could lead to
significant share price reduction. Consequently, the
investment is considered high risk.
Institutional Sales
Carrick Ryan +61 8 9268 2864
Justin Stewart +61 8 9268 3062
Simon van den Berg +61 8 9268 2867
Chris Chong +61 8 9268 2817
Digby Gilmour +61 8 9268 2814
Cooper Rogers +61 8 9268 3053
Wealth Management
Nicola Bond +61 8 9268 2840
Bradley Booth +61 8 9268 2873
Adrian Brant +61 8 9268 3065
Nathan Bray +61 8 9268 2874
Sven Burrell +61 8 9268 2847
Simon Casey +61 8 9268 2875
Tony Chien +61 8 9268 2850
Tim Cottee +61 8 9268 3064
David Cross +61 8 9268 2860
Nicholas Draper +61 8 9268 2883
John Featherby +61 8 9268 2811
Ben Fleay +61 8 9268 2844
James Gatti +61 8 9268 3025
John Goodlad +61 8 9268 2890
Andrew Gribble +61 8 9268 2842
David Hainsworth +61 8 9268 3040
Neil Inglis +61 8 9268 2894
Murray Jacob +61 8 9268 2892
Gavin Lehmann +61 8 9268 2895
Shane Lehmann +61 8 9268 2897
Steven Loxley +61 8 9268 2857
Andrew Macnaughtan +61 8 9268 2898
Scott Metcalf +61 8 9268 2807
David Michael +61 8 9268 2835
Jamie Moullin +61 8 9268 2856
Chris Munro +61 8 9268 2858
Michael Munro +61 8 9268 2820
Ian Parker +61 8 9268 2810
Charlie Ransom
(CEO)
+61 8 9268 2868
Mark Sandford +61 8 9268 3066
David Smyth +61 8 9268 2839
Greg Soudure +61 8 9268 2834
Sonya Soudure +61 8 9268 2865
Dirk Vanderstruyf +61 8 9268 2855
Samuel Williams +61 8 9268 3041
Jayme Walsh +61 8 9268 2828
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