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Lucapa Revenue Plummets in Second Quarter

Jul 13, 2020 9:27 AM   By Rapaport News
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RAPAPORT... Sales of rough from Lucapa Diamond Company’s Lulo mine in Angola plunged in the second quarter, as both the average price and carats sold fell sharply due to the coronavirus pandemic.

Revenue slid 80% year on year to $2 million, the company said last week. Sales volume dropped 40% to 3,346 carats, while the average price slumped 67% to $594 per carat. The miner was unable to sell its rough at tender during the period, with Covid-19 locking down most markets. 

The stones Lucapa offloaded during the period were sold into its cutting and polishing partnership with Graff subsidiary Safdico, which purchases the stones at full rough-market value and shares the proceeds of the polished sale with the miner. 

Production for the period fell 24% to 2,944 carats. During the three months, Lucapa recovered 86 stones weighing more than 4.8 carats from Lulo, a 31% decrease from the previous year. Those included 30 special-size stones — above 10.8 carats — the largest of which was a high-quality, 171-carat, white diamond.

The miner was able to access the flood-plain (leziria) area at Lulo when the wet season ended. Exploration at the site led to the discovery of new, extensive gravel deposits, which returned a high average ore grade, Lucapa said.

The Mothae mine in Lesotho, on care and maintenance throughout the whole quarter as a result of the virus, had no production during the quarter, Lucapa noted. However, it did sell 3,962 carats of rough from the mine into a cutting and polishing partnership. Those diamonds yielded $2 million, a 42% drop over the same period a year ago, with the average price increasing 2% to $505 per carat.

Meanwhile, during the closure, Lucapa is working on improvements to the mine, including modifications to the treatment plant that could help increase ore-processing capacity by 60%, it said. The miner plans to recommence operations at the site “as pandemic and market constraints allow,” it stated.

At the end of the quarter, Lucapa had 784 carats in its Mothae inventory and 2,647 carats at Lulo, which included a number of special, high-quality stones.

Image: Five diamonds from a newly discovered deposit in the flood-plain area of Lulo. (Lucapa Diamond Company)
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Tags: Coronavirus, COVID-19, Graff, lucapa, Lucapa Diamond Company, Lulo, Lulo mine, Mothae, Mothae Mine, Rapaport News, Safdico
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