|
|
Lucara Cuts Production Outlook as 2Q Revenue, Profit Plummet
Aug 13, 2015 3:35 AM
By Rapaport News
|
|
|
RAPAPORT... Lucara Diamond Corp. reduced its full-year production outlook to between 350,000 carats and 400,000 carats for this year compared with its original guidance of between 400,000 carats and 420,000 carats, according to a company announcement yesterday.
The cut comes as the southern Africa miner reported that revenue fell 46 percent year on year to $38.1 million in the second quarter that ended on June 30. The drop was attributed to reduced production, a weaker diamond market and a lack of large diamond sales. The average price for rough diamonds sold during the period plummeted 51 percent to $412 per carat. As a result, Lucara's profit dropped 45 percent to $8.6 million.
At the Karowe mine in Botswana, Lucara’s sole producing asset, production declined 14 percent to 85,714 carats, due to the implementation of the company’s plant optimization project. Lucara said that the optimized crusher circuits for separating diamonds from the mined ore are now fully integrated.
“The plant optimization project has been completed on schedule and within budget,” said William Lamb, Lucara’s CEO. “The large diamond recovery is performing extremely well as evidenced by the recovery of large stones that contributed to the last exceptional stone tender. We are now working on optimizing the recovery of our smaller, lower value diamonds”.
The full-year production outlook was trimmed as the company plans to process less diamond ore in the second half while it works to optimize its dense medium separation circuit’s recovery of smaller, lower value diamonds. Lucara reduced its revenue guidance for the year to between $200 million and $220 million from its previous forecast of between $230 million and $240 million, citing a lower planned volume of production and weak diamond market. Deferring diamond production will enable the company to sell it at a later date into a potentially stronger rough diamond market, the company said.
A total of 146 diamonds larger than 10.8 carats were recovered during the three months that ended June 30, compared with 153 large diamonds recovered during the first quarter. Nevertheless, the average size of large diamonds recovered rose 23 percent quarter on quarter to 31.16 carats. The largest diamond recovered during the quarter was a 342 carat stone that was sold after the reporting period for $20.6 million.
Its first exceptional stone tender for diamonds larger than 10.8 carats wasn’t held until July, in contrast to last year when the first tender was held in April. The July tender garnered $68.7 million versus $50.5 million earned in the April 2014 sale.
|
|
|
|
|
|
|
|
|
|
Tags:
Botswana, lucara, Production, Rapaport News, rough
|
|
|
|
|
|
|
|
|
|
|