Lucara Diamond Corp. reduced its production forecast after a shortage of equipment in the second quarter led to lower mining levels than the company expected.
Lucara’s mining contractor, Aveng Moolmans, experienced “equipment-availability issues” that resulted in the miner extracting less ore than planned from its Karowe deposit, Lucara said Thursday. The diamond company therefore focused on mining waste material to ensure future access to larger volumes of ore from the lower-grade but higher-value south lobe.
Although the south lobe yielded higher volumes during the quarter, the overall drop in the amount of mined ore prompted Lucara to lower its full-year production outlook to between 265,000 and 285,000 carats, compared with a previous forecast of 290,000 to 310,000 carats. The new numbers, if realized, would represent a decline of up to 25% from 2016’s output of 353,974 carats.
The company also reduced its projected sales volume to between 260,000 and 275,000 carats of rough, versus an earlier prediction of 290,000 to 310,000 carats. Still, the miner has maintained its revenue forecast of $200 million to $220 million, as ore from the south lobe generally yields larger, higher-value rough diamonds.
In the second quarter, Lucara’s rough sales fell 43% to $79.6 million, though the $63.1 million sale of the 813-carat Constellation diamond last year skewed the figures. Excluding that transaction, revenue was up 2.4%. First-half sales slid 45% to $105.7 million, with the Constellation deal included.
Lucara’s average selling price declined 27% to $1,336 per carat in the April-to-June period — again, counting the Constellation sale — and decreased 31% to $852 million in the first six months. Net profit dropped 30% to $32.2 million in the second quarter and plunged 52% to $30.6 million in the first half.