Lucara Diamond Corp. is pleased to announce that the Board of Directors has approved the return of Canadian $172 million to shareholders by way of a special dividend of Canadian $0.45 per share to the holders of the Company's common shares. The special dividend will be paid in addition to the Company's existing progressive 2016 quarterly dividend of Canadian $0.015 per share.

A total dividend payment of Canadian $0.465 per share is hereby declared and will be paid on September 15, 2016 to holders of record of the Company's common shares at the close of business on September 2, 2016.

The payment of this dividend is consistent with the Company's dividend policy providing for the payment of quarterly dividends and the payment, from time to time, of a special dividend based on revenues generated based on the Company's overall financial position and other factors existing at the time under consideration. The payment of future cash dividends under the policy is subject to the Board's continuing determination that the declaration of a dividend is in the best interests of Lucara and Lucara's shareholders and is in compliance with all laws and agreements of Lucara applicable to the declaration and payment of cash dividends.

William Lamb, President and CEO of Lucara commented: "Lucara is rewarding its shareholders with a significant special dividend which is unprecedented in the industry and shows our commitment to rewarding our shareholders based on the Company's success in generating strong financial returns. The Karowe mine is a premier diamond deposit and continues to recover high quality stones, which is resulting in continued growth in the Company's cash balance. Following this dividend payment, we will continue to maintain a strong balance sheet and continue to seek value accretive opportunities, which includes advancing our exploration and drilling program to increase the Company's resources"