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Lucara Tender Beats Expectations
Dec 19, 2019 5:57 AM
By Rapaport News
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RAPAPORT... Lucara Diamond Corp. achieved higher sales than it
expected at its final tender of the year as market stabilization drove an
increase in rough prices.
The owner of the Karowe mine in Botswana brought in $52.9
million, 16% above its prediction, capping off a year of revenue growth, it
said in a statement Wednesday.
“Though it is too early to call a trend, prices achieved
in our final sale of the year reflect a stronger, more stabilized market
environment and continued strong demand for Karowe diamonds,” said Lucara CEO
Eira Thomas.
Last Thursday’s sale generated an average price of $548
per carat, with pricing improving in all size categories, the company added. As
a result, full-year sales rose 9% to $192.5 million, beating Lucara’s revenue forecast
of $170 million to $180 million. However, the average price of $468 per carat for
2019 was 7% lower than the $502 per carat the company reported for 2018.
Lucara benefited from strong demand for rough on its
digital supply platform, Clara, with its customer base increasing during the
year to 27 clients from four. The
program, which carried out 16 sales throughout 2019, is ready to take on goods
from third parties, and Lucara expects to begin trials with “at least two”
other providers early next year.
“Demand in recent
[Clara] sales has now outstripped available supply,” the company commented. The
technology, which matches rough availability with polished demand, “is
achieving strong prices for Karowe diamonds and generating attractive margins
for its customers, confirming that significant value can be unlocked by selling
rough diamonds in a more efficient way.”
The miner considers itself well positioned for an
increase in diamond prices in the next year or two as rough supply begins
to run out at ageing mines. This gives reason to be optimistic for operations
at Karowe and for Lucara’s plans to expand into underground mining, which would
extend the site’s lifespan through to 2040, Thomas noted.
Image: A 240-carat rough Lucara unearthed in January. (Lucara Diamond Corp.)
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Tags:
Botswana, Clara, Eira Thomas, Karowe, lucara, Lucara Diamond Corp., mining, Rapaport News, rough, rough demand, Rough Diamonds, rough market, rough prices
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