Lucara says the diamond market has been ‘healthier’ for years

Next year, which marks the 10th year of operations for the Karowe mine, Lucara expects to produce up to 340,000 carats, to be sold through a multi-channel approach, which would generate revenue between $185 million and $215 million.

The company said the figure does not include any estimated revenue contributions from large and exceptional diamonds that have historically been a regular part of Karowe’s production profile.

“The business environment for diamonds and diamond jewelry is the healthiest we have seen in several years,” CEO Ira Thomas He said in the statement.

The diamond market stalled at the height of the COVID-19 pandemic, raising fears that oversupply could harm the sector for years. But increased purchases by middlemen who cut, polish and trade stones have wiped out miners’ stocks, even with Alrosa and its closest competitor, Anglo American’s De Beers, Prices have gone up.

The Karowe mine in Botswana, which began commercial operations in 2012, is the only diamond operation in recorded history that yielded two stones over 1,000 carats – 1,758 carats from Soilu In 2019 and 1109 carats by Lesedi La Rona In 2015, which sold for $53 million.

Lucara says the diamond market is the healthiest in years
Open drilling will stop in 2026, but underground mining can continue until 2040.Image courtesy of Lucara Diamond.)

Beyond the Sewelo, the only larger diamond ever discovered is the 3.106-carat Cullinan Diamond, which was discovered in South Africa in 1905. The Cullinan was later cut into smaller stones, some of which now form part of the crown jewels of the British royal family.

To date, Karowe has produced 17 diamonds greater than 100 carats, including five over 300 carats. Many of them were recovered from EM/PK(S), which is a major economic driver of the proposal $514 million underground expansion from the mine.

Lucara said open drilling at Karowe will cease in 2026, but mining could continue underground until at least 2040, thanks to ongoing regeneration.

The capital costs of the expansion, which remain on time and within budget, are expected to reach $110 million in 2022.

Lucara said work will focus on initiating column sinking activities, commissioning energy and detailed engineering for the underground development.

Capital expenditures and sustainable projects are expected to reach $17 million, with a focus on completing a community sports facility, dewatering activities, and expanding the tailings storage facility.

Karowe is still one of the largest diamond mines in the world At a rate of 300,000 carats of high value every year.

In 2022, Lucara aims to process 2.6 million to 2.8 million tons of ores, which should yield between 300,000 and 340,000 carats.

Increase online sales

Lucara emphasized the role that Clara’s 100% owned web-based sales platform continues to play in the company’s bottom line.

She said Clara is growing in terms of traded volumes and customer engagement. She noted that the platform’s trials and discussions with third-party suppliers of rough diamonds are underway to build supplies.

“The rationale for a web-based digital sales platform for the transaction of rough diamonds has never been stronger, sparked by the industry’s need for increased transparency, global travel restrictions, and a new openness to using innovation and technology to create a more efficient system,” Thomas said.

Taken from Alrosa 2021 Diamond Investment Market Report.

Lucara indicated that it will continue to use three different sales channels to increase revenue and generate steady cash flow to support Karowe’s continued expansion.

The company’s optimism contrasts with DeBeer’s dip in sales revenue. The largest diamond mine in the world by value reported on Wednesday It sold $430 million worth of raw materials this month, down from $492 million in sales it earned in previous session.

Despite Lucara’s positive outlook, shares fell 4.6% in early trading in Toronto to C$0.62. The company’s market capitalization is about C$287 million ($226 million).

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