Lucara Diamond Corp., announcing its annual results for the year ended December 31, 2019 reported a revenue of US$192.5 million for the period as compared to a revenue of US$176.2 million notched in 2018. This figure represented a realised price of US$468 per carat (2018: US$502 per carat). The results exceeded the Company’s guidance for 2019 which had been pegged at U$170 million to US$180 million.

The Company noted a “strong operational performance at Karowe”, which included record production through the plant in 2019. Total tonnes mined amounted to 9.8 million; Ore and waste mined stood at 3.3 million tonnes and 6.5 million tonnes respectively; Ore processed totalled 2.8 million tonnes. A total of 433,060 carats were recovered in the year, including 29,990 carats recovered from previously milled material (guidance: 400,000 to 425,000 carats).

The year 2019 also represented “another strong year” for the recovery of specials (single diamonds in excess of 10.8 carats) from direct milling ore, the Company emphasised,

with 786 stones totalling 24,424 carats recovered. These included 31 diamonds in excess of 100 carats, of which two stones were in excess of 300 carats, including the historic 1,758 ct Sewelô diamond. “Specials were also recovered in treatment of historic, pre-XRT recovery tailings, including a 375 carat stone in Q3 2019,” the Company added.  

Lucara’s adjusted EBITDA for the year ended December 31, 2019 was US$73.1 million as compared to adjusted EBITDA for the same period in 2018 of US$60.5 million, an increase of 21% (Non-IFRS measure).

The Company’s net income for the year amounted to US$12.7 million (US$0.03 per share) as compared to net income of US$11.7 million (US$0.03 per share) in 2018.

As at December 31, 2019, the Company had cash and cash equivalents of US$11.2 million and no debt.

“In 2019, the Company invested US$29.0 million in the business, primarily towards the completion of an underground feasibility study, and, improvements to plant and equipment to maximize carat recoveries,” Lucara noted. “The Company’s US$50 million credit facility was available for use as at December 31, 2019.”

The Company paid CA$0.025 quarterly dividend during the first three quarters of 2019, thus returning US$22.4 million (CA$0.075 per share) to shareholders in 2019 as compared to US$30.3 million or CA$0.10 per share in 2018.

“Since inception in June 2014, the Company has paid dividends of US$271 million (CA$349 million),” the Company revealed.

Lucara’s digital platform Clara completed its first year of operations with a total of 15 sales, 27 customers and volume transacted worth US$8.4 million. “Development activities were completed under budget at US$0.4 million in 2019,” Lucara said. “Clara is poised to achieve significant growth in 2020 with the addition of further customers and third-party production.”

Eira Thomas, Lucara’s President & CEO commented: “Our strong operating results for 2019 reflect Lucara’s continued focus on safe, reliable operations which has delivered increased productivity at lower costs and provides a solid foundation to support our next stage of growth - an underground expansion at Karowe which has the potential extend our mine life to 2040, add net cash flow of US$1.22 billion and gross revenues of US$5.25 billion.”

She added, “Our second business, Clara, continues to deliver solid results and is on track to steadily grow third party supply to the platform over the course of the coming year. In 2019 Lucara also continued to explore ways and means to maximize the value it receives for its diamonds. Our ground-breaking agreement with Louis Vuitton in January 2020 is another example of how we are delivering on this commitment. Through this agreement, we will demonstrate that greater collaboration within the supply chain can unlock value and increase transparency from mine to consumer.”

Referring to the sales of Karowe diamonds, Lucara reported that in 2019, a total of 30 individual diamonds were sold for a value of > US$1 million including 11 diamonds > US$2 million of which two diamonds sold for > US$5 million each. “Sales of individual stones at prices between US$2 million and US$5 million were consistent with previous years,” the Company said. “Achieved prices in 2019 for high value single diamonds were impacted by significant price erosion in high colour (D) 10 carat and 20 carat polished.”

Certain stones from the Karowe production and other aggregated diamonds were offered for sale through the Clara platform during 2019. As 2020 progresses, a greater proportion of certain sales parcels from Karowe will move to the Clara platform, rather than being sold through the quarterly tender process, Lucara stated.

Outlining its Outlook for 2020, Lucara forecasts revenues between US$180 million and US$210 million. It added: “Diamond price assumptions are considered to be consistent with 2019. The Company expects to recover 350,000 to 390,000 carats from the processing of 2.5 to 2.8 million tonnes of ore. Diamonds sold are expected to be between 350,000 carats and 390,000 carats.”

Lucara has earmarked a budget of up to US$53 million for early works related to a proposed underground mine at Karowe. “An investment decision, subject to receipt of all required authorizations and the arrangement of financing, is expected in H2 2020,” the Company said. “Following the positive results of a feasibility study announced on November 4, 2019 and based on the Company’s ability to fund these initial capital expenditures from operating cash flow, a programme of early works, including detailed engineering and design work has been approved to mitigate key risks related to schedule.”