Lucara Diamond Corp.’s sales slumped in 2018, as results for the previous year included the sale of a 1,109-carat rough diamond.
Proceeds fell 20% to $176.2 million, the company said Thursday. While sales volume rose 35% to 350,798 carats, the average price dropped 41% to $502 per carat.
Lucara produced a record number of stones over 10.8 carats from its Karowe mine in Botswana, including 33 weighing more than 100 carats and five over 300 carats. However, total revenue fell because 2017’s figure included the Lesedi La Rona, which fetched $53 million. Excluding that income, revenue grew 5%, while the average sale price declined 22%. Production for the year jumped 47% to 366,086 carats.
Profit plunged 82% to $11.7 million in 2018, the miner said, as it invested $60.7 million in improvements to the mine, including the transition from open-pit to underground mining, which it believes will extend the mine life by about 11 years. It also spent money on purchasing Clara Diamond Solutions, a sales platform that enables the miner to match buyers with available rough based on their polished needs.
“The investments we made in our business in 2018…advanced and significantly de-risked our plans for underground expansion at Karowe and brought up a complementary new technology business that has the potential to contribute significant future cash flows,” said Lucara CEO Eira Thomas.
Revenue for the fourth quarter rose 9% to $40.6 million. Although sales volume jumped 59% to 110,553 carats, the average price fell 31% during the period. Lucara posted a net loss of $6.2 million for the three months ending December 31, compared with $1.7 million the previous year.
The miner expects Karowe production to fall to between 300,000 and 330,000 carats in 2019. It anticipates sales volume will decline to 300,000 to 320,000 carats.
Lucara’s stock fell 8% Friday following the results.
Image: Karowe mine. (Lucara Diamond Corp.)