Industry News by Nemesis

Lucara's 4Q Revenue Declines but Miner Swings to Profit

February 24, 2016

Lucara Diamond Corp. reported revenue declined 7.5 percent year on year to $65.2 million in the fourth quarter that ended December 31 as the diamond market “experienced some weakening” during the year. 

The miner nonetheless turned a $19 million profit, following a loss of $16.8 million a year before on the back of a $21.1 million impairment and restoration charge. The average price per carat sold increased from $675 to $693 per carat, according to a statement February 23. Production from the company’s Karowe mine in Botswana fell 22 percent to 89,247 carats. 

Revenue in 2015 slumped 16 percent to $223.8 million, while the average price dropped from $644 to $593 per carat. Profit for the year surged 70 percent to $77.8 million. 

“The diamond market experienced some weakening in 2015 and we retain a cautious outlook on diamond prices for 2016,” said William Lamb, Lucara’s president and chief executive officer.

“The long-term fundamentals for the diamond market remain strong and with the outstanding quality of our Karowe production, which will be increasingly from the high-value south lobe, Lucara is in an excellent position for continued financial growth and we remain committed to achieving strong returns for our shareholders.” 

The company forecast production at Karowe of more than 350,000 in 2016 compared with 365,690 in 2015. Revenue is forecast between $200 million and $220 million excluding the anticipated sale of the 1,000-plus-carat Lesedi La Rona, the second largest diamond ever recovered, and an 813-carat gem.

 

Source: Rapaport

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