Announcing its annual results for 2018 last week, Lucara Diamond Corp reported a drop in revenue as well as average price per carat realised as compared to the previous year, where results were boosted by the sale of the historic 1,109 carat Lesedi La Rona (LLR). The Company added that the figures were also impacted by the lower quality of many of the specials recovered, though total recovery in the large (+10.8 cts) category reached record levels.

The Company said that its Karowe Diamond Mine in Botswana achieved a strong operational performance during the year, meeting or exceeding guidance in all areas. 2018 was also a record year with the recovery of 829 Specials stones totaling 24,793 carats recovered (representing 6.8 weight percent of total carats), including 33 diamonds in excess of 100 carats, of which 5 stones were in excess of 300 carats.

Elaborating on the overall financial results, Lucara reported that it earned total revenue of US$ 176.2 million (2017: US$ 220.8 million) or US$ 502 per carat (2017: US$ 847 per carat). However, it pointed out that 2017 revenues included the sale of the historic LLR which sold for US$ 53.0 million (US$ 47,777 per carat).  Excluding this figure, revenue in 2017 was US$ 167.8 million with an average sales price of US$ 647 per carat, the Company said.

It added that average sales price per carat in 2018 was impacted by a higher recovery of finer diamonds, although recovery of Specials was at a record level. Further, Lucara said, it has also been building inventory for its Clara online digital sales platform and these will be made available for sale through the ramp up period, based on demand. The inventory is estimated to have a realized value of approximately US$ 2.3 million.

Sales of individual stones at prices between US$ 2 million and US$ 5 million were consistent with previous years.  However, in 2018 no individual stones were sold at prices between US$ 5 million and US$ 10 million (as compared to 1 to 3 stones each year between 2015 and 2017) and only one stone sold for more than US$ 10 million.

Clara completed its inaugural sale in Q4 2018 with total sales of US$ 660,865 achieving a premium margin over traditional sales tenders and demonstrating the value that can be unlocked using this new approach, Lucara noted. It said that development activities were completed under budget at US$ 1.8 million.

Eira Thomas, President & CEO commented: "The investments we made in our business in 2018 resolved the waste stripping bottleneck, advanced and significantly de-risked our plans for underground expansion at Karowe and bought us a complementary new technology business that has the potential to contribute significant future cash-flows.” 

She said that 2019 got off to a strong start with the recovery of several, +100 carat, high quality gem diamonds which will be offered for sale at the first tender of the year, scheduled to close on March 7, 2019. 

In 2019, Lucara forecasts revenues between US$ 170 million and US$ 200 million, consistent with the forecast for 2018.  These projections include "Specials" , but exclude the sale of any truly unique diamonds. During the year, diamonds recovered are expected to be between 300,000 carats and 330,000 carats and diamonds sold are expected to be between 300,000 carats and 320,000 carats.