Lucara Diamond Corp. reported that its final diamond tender of 2019, held on December 12th, generated sales proceeds of US$52.9 million; realising an average price of US$548 per carat. The total sales revenue was 16% higher than expected, the Company stressed, saying, “Market pricing improvements were noted in all size classes.”

With the December tender, Lucara's 2019 revenue reached C$192.5 million (including Clara);  exceeding the 2019 revenue guidance of C$170-C$180 million. The average price realised for the year amounted to US$468 per carat. Lucara noted that 30 diamonds  sold for more than C$1 million each, in the period.

The Company stressed that Clara (Lucara’s digital platform) continued to make “excellent progress” in 2019. In the period, 16 sales were completed; and  its customer base expanded “well beyond expectations”, going  from four to 27 clients. 

“Further, demand in recent sales has now outstripped available supply and the platform is ready to receive a larger quantity of third-party goods to support its next phase of growth,” Lucara stated. “Trials with at least two other providers are anticipated beginning in early 2020.  Clara 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, using technology and based on specific demand for individual polished products.”

The Company   announced that a budget of up to US$53 million has been approved for “early works” related to the proposed underground mine at Karowe (the positive results of the feasibility study were announced earlier, in November 2019). 

Lucara asserted that an investment decision, subject to receipt of all required authorisations and the arrangement of financing, is expected in H2 2020. 

“The approved budget is based on the Company's ability to fund these initial capital expenditures from operating cash flow in 2020,” the Company added. “The early works programme will include detailed engineering, procurement, earth works and pre-sinking of production and ventilation shafts to mitigate key risks related to the schedule.” 

Eira Thomas, CEO commented: "Though it is too early to call a trend, prices achieved in our final sale of the year reflect a stronger, more stabilised market environment and continued strong demand for Karowe diamonds.”

She went on to say: “The Company remains well positioned and highly levered towards further strengthening in diamond prices over the next 12-24 months as supply constraints from large, maturing, mines begin to manifest.  This bodes well, not only for our current open pit operations, but also supports our plans for underground expansion to extend Karowe's mine-life to at least 2040, with the potential to generate an additional US$4 billion in revenue."

Thomas concluded, saying, "Our strong performance at the mine, combined with the delivery of a robust underground feasibility study is supplemented by encouraging early results from Clara.   2019 marked the first of a two-year ramp up period for our secure digital sales platform and we are pleased to report that our customer base has grown beyond expectations. We remain on track to deliver strong cashflows consistent with our five-year plan."