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Supply Deal Pays Dividends for Lucara

May 8, 2022 7:42 AM   By Rapaport News
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Lucara Diamond Corp.’s revenue and profit soared in the first quarter of 2022 amid the sale of higher-value goods and increased income from its supply deal with Belgian manufacturer HB Antwerp.

Revenue climbed 28% to $68.2 million for the period ending March 31, the miner reported last week. Net profit surged to $19 million, compared with $3.4 million a year earlier.

“Lucara begins the year on a positive trajectory...and delivered another strong quarter of operating and financial results in the first quarter, reflecting solid performance at the mine, combined with continued buoyancy in diamond prices,” said Lucara CEO Eira Thomas. “Our multichannel approach to sales through tenders, [online platform] Clara and HB continued to mature, creating alignment along the value chain, delivering efficiencies and higher margins.”

Some $45.2 million in revenue came from Lucara’s agreement with HB Antwerp, which has committed to buying all the miner’s rough diamonds above 10.8 carats through December. That compares with $38 million in the first three months of 2021. Prices are based on the estimated value of the polished outcome, with Lucara receiving an additional payment at a later stage if the polished price exceeds initial expectations. The miner received $11.7 million in top-ups during the quarter, versus $9.1 million in 2021.

The company also derived $7 million in sales from Clara, a 17% increase from the $6 million it recorded a year earlier.

Lucara, which sources its diamonds from the Karowe mine in Botswana, saw a 44% jump in the average selling price to $690 per carat, reflecting the shift to higher-value goods and stronger overall prices.

In February, Lucara lifted its guidance for the full year as a result of continued high rough prices. It now expects revenue of $195 million to $225 million for 2022, compared with its previous forecast of $185 million to $215 million.

“Despite current geopolitical challenges, Lucara remains optimistic about diamond prices as natural rough-diamond supply constraints continue to manifest globally,” Thomas added.

Image: The processing plant at the Karowe mine. (Lucara Diamond Corp;)
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Tags: Botswana, Clara, diamonds, Eira Thomas, HB Antwerp, Karowe mine, lucara, Lucara Diamond Corp., Rapaport News, Rough Diamonds
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