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Lesedi La Rona Boosts Lucara Sales
Nov 5, 2017 5:42 AM
By Rapaport News
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RAPAPORT... Lucara Diamond Corp.’s revenue more than doubled in the
third quarter as it sold the 1,109-carat Lesedi La Rona rough diamond, the
miner reported Thursday.
Sales came to $77.9 million in the three months that ended
September 30, up from $38.1 million a year earlier, while the average price
jumped to $1,161 per carat compared with $332 per carat last year. During the
quarter, Lucara sold the Lesedi La Rona to Graff Diamonds for $53 million, or
$47,777 per carat. Profit stood at $32.9 million for the period, versus a loss of
$3.8 million a year ago.
However, while sales increased for the quarter, they fell 20%
in the first nine months to $183.6 million, partly due to the sale of the
813-carat Constellation rough diamond for a record $63.1 million in May 2016.
In addition, the company’s new mining contractor, Aveng
Moolman, failed to increase its operating levels as quickly as expected, the
company stated. As a result, less ore was mined from the Karowe deposit’s
high-value south lobe than originally planned, so Lucara was forced to
substitute it with lower-grade stockpiles.
Production consequently slid 23% to 62,425 carats in the
third quarter, and Lucara reduced its sales forecast to between
260,000 and 270,000 carats for the year, compared with an earlier projection of
290,000 to 310,000 carats. The miner also slashed its full-year revenue
forecast to between $165 million and $175 million — excluding the sale of the
Lesedi La Rona — from an earlier guidance of $200 million to $220 million.
“We are addressing issues with our mining contractor,” said
Lucara CEO William Lamb. “Improvements are being made, and we expect the
shortfall in recovered carats from the south lobe this year to contribute to
future cash flows.”
Lucara also released the results of a feasibility study for
an underground mine at Karowe, saying it was potentially economically viable. The $195 million extension at the Botswana deposit
would enable Lucara to continue production at Karowe even after it depletes the
current open-pit operations in 2026, it said.
The underground mine contains potential production of 2.72
million carats over its life span, Lucara said. The operations would focus on Karowe’s
south lobe, where the company found the Lesedi La Rona in November 2015.
“We have seen ongoing improvement in the value of diamonds
from the south lobe, and the development of an underground mine has the
potential to add significantly to the life of mine at Karowe,” Lamb said.
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Tags:
Aveng Moolman, Constellation, Graff Diamonds, Karowe, Karowe mine, Lesedi La Rona, lucara, Lucara Diamond Corp., Rapaport News, William Lamb
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