News

Aug 04, 2017

Lucara’s Revenue for Q2 2017 Rises to US$ 79.6 Mn; Average Price at US$ 1,336 Per Ct

Announcing results for the second quarter of 2017, Lucara Diamond Corp. reported a      revenue of US$ 79.6 million for the period, at an average per carat price of US$ 1,336; as compared to   a revenue of US$ 77.7 million (excluding the sale of the Constellation diamond for US$ 63.1 million) at an average price of US $1,017 per carat  achieved in  Q2 2016.

The Company noted that reported revenue for the quarter excludes US$ 0.3 million of proceeds received post Q2 for the Company’s June tender.

Lucara’s operating margins for Q2 2017 were US$ 1,089 per carat or 82%, which, the Company said “is largely due to the Company’s first exceptional stone tender in 2017”. This tender garnered proceeds of US$ 54.8 million or US$ 31,010 per carat. “Year to date revenue was US$ 105.7 million or US$ 852 per carat achieving a 73% operating margin,” the Company reported.

The Company’s cash balance as at the end of the quarter stood at US$ 62.7 million as compared to US$ 53.3 million in the previous year. “The increase in cash is due to the Company’s exceptional stone tender and regular tender during the quarter and was partially offset by operating costs, royalty payments and capital expenditures of $17.0 million,” Lucara said. “The Company’s US$ 50 million credit facility remains undrawn.”

 The Company declared earnings per share of US$ 0.08 for H1 2017 (H1 2016: $0.17 earnings per share). “The Company’s prior year earnings per share were largely impacted by the sale of the Constellation diamond. Excluding the sale of the Constellation diamond 2016 earnings per share was US$ 0.08,” elaborated the Company. In Q2 2017, the Company paid its quarterly dividend of C$ 2.5 cents per share or US$ 7.1 million on June 15, 2017;  bringing the total dividend paid in 2017 to US$ 14.2 million.

Providing an operational update as well, Lucara said that during Q2 2017, it had recovered 113 specials (+10.8 carats) “which equated to 5.9% weight percentage of recovered carats which was in line with expectations (Q2 2016: 4.6%)” from its Karowe Mine.

Adjusting its forecast due to reduced mined ore volumes, the Company’s management reduced forecast carats recovered to between 265,000-285,000 carats and carats sold to between 260,000-275,000 carats; while revenue guidance has been maintained at $200 to US$ 220 million. 

William Lamb, President and Chief Executive Officer commented: “Sales in the First Half achieved extremely strong prices and with our focus on cost control, the Karowe mine continues to deliver strong operating margins. We have worked with our new mine contractor to improve performance during Q2 and Q3, and our mining department is now achieving our productivity targets. Our focus on the process plant is to complete the capital projects, further enhancing diamond recovery by the end of Q3 this year. This will place the Karowe mine in an even stronger position to maximize value from the recovery and sale of diamonds from the high value south lobe.”