Lucara Sales Jump as Supply Deal Pays Off

May 9, 2021 10:02 AM By Rapaport News

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RAPAPORT... Lucara Diamond Corp. saw sales and profit recover in the first three months of 2021 as demand improved and a supply deal with a Belgian manufacturer bore fruit.

Revenue jumped 56% year on year to $53.1 million for the period, the miner reported Thursday. Net profit stood at $3.4 million, compared with a loss of $3.2 million a year earlier.

“Lucara has bounced back in the first quarter of the year, demonstrating its resiliency at a time of continued uncertainty in respect of the ongoing Covid-19 pandemic,” said CEO Eira Thomas.

Some $38 million in revenue came from Lucara’s agreement with HB Antwerp, under which the cutting firm has committed to buying all of the miner’s rough diamonds above 10.8 carats through December 2022. Prices are based on the estimated value of the polished outcome, with Lucara receiving a top-up payment at a later stage if the polished price exceeds initial expectations. The miner received $9.1 million in top-ups during the quarter.

In contrast, Lucara canceled all tenders for that size category from early March 2020 onward due to the pandemic. That resulted in weak sales during the first three months of 2020.

The miner also derived $6 million in sales from its Clara online platform — double the $3 million it recorded a year earlier — and $9.1 million from tenders.

Lucara, which sources its diamonds from the Karowe mine in Botswana, saw a 46% jump in the average selling price to $579 per carat, reflecting the shift to higher-value goods and stronger overall prices.

“The diamond market began 2021 in a healthier position than it has at any stage over the past five years, resulting in increasing price performance in virtually all sizes and quality of diamonds” in the first quarter, the company explained.

Image: The Karowe mine. (Lucara Diamond Corp.)

Tags: Clara, COVID-19, Eira Thomas, Karowe, Karowe mine, lucara, Lucara Diamond Corp., mining, Rapaport News