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Lucara's 1Q Loss Grows to $4M, Cash Position at $26M

May 11, 2012 7:40 AM   By Jeff Miller
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RAPAPORT... Lucara Diamond reported its first fiscal-quarter expenses were $3.3 million, up from $1.2 million one year ago, and it recorded a net loss of $4.2 million compared with $1.9 million. The company's net cash position fell to $26.3 million for the three months that ended on March 31, compared with $48.6 million one year earlier.

The company's president, William Lamb, described this period as a ''pivotal time'' for Lucara Diamond as it made the transition from a development-stage explorer to a producing diamond-mining company during this quarter.

''I would like to thank the team involved with the construction of Karowe for their outstanding work. Not only have they built a state-of-the-art mine within budget but also began commissioning the mine within only 18 months of completing a feasibility study on the project, which is a remarkable achievement,'' Lamb said. ''We now have an operating mine that is already proving up the quality of the asset. Karowe means 'precious stone,' and given the high-level of interest shown from the industry, it is a very suitable name. I'm proud to say that since the inception of Lucara we have achieved every objective we have set out to accomplish - a track-record we intend on maintaining.''

Construction costs for Karowe as of March 31 have been $93 million and Lucara anticipates completing the project on budget with an additional cost of $24.5 million. Already, Karowe's initial production of 40,000 carats of rough diamonds are being prepared for sale in early June, which will boost revenue for the second quarter.

Several large diamonds have been recovered from Karowe so far, including nine special stones larger than 10.8 carats. The three largest stones recovered are 26.57 carats, 25.88 carats and 24.59 carats. Diamonds recovered are of high-quality and show strong crystal shapes, according to Lucara.

The mining company's Mothae diamond project completed a delineation drilling program and now a preliminary economic assessment report --to determine the milling and diamond liberation characteristics-- is underway.  The results from the assessment will be used to make an informed investment decision regarding Mothae during the fourth quarter of 2012.

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Tags: diamond, Jeff Miller, Karowe, lucara, mining, Mothae
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