Lucapa Diamond Company returned to profit in the first half, amid an increase in sales and a higher average price, the company said Tuesday.
The miner recorded a net profit of $1.1 million in the six months ending June 30, compared with a loss of $4.3 million during the same period last year. Sales of rough from the company’s Lulo mine in Angola and Mothae deposit in Lesotho rose 85% to $29.4 million, as Lucapa produced a larger number of higher-quality diamonds. The average price for Lulo rough jumped to $3,668 per carat, more than twice the 2018 figure. Diamonds from Mothae, which began commercial production in December, fetched an average of $588 per carat.
Production at the Angola site fell 24% to 7,236 carats, as the company processed ore from lower-grade mining areas. However, the company’s total production more than doubled to 20,504 carats. Mothae’s 13,267-carat yield was 36% higher than the company had expected in the first half, Lucapa explained.
During the January-to-June period, the miner recovered 445 stones weighing more than 4.8 carats. Those included a 126-carat diamond from Mothae and two stones larger than 100 carats from Lulo. At the end of the period, Lucapa had 3,855 carats in its Mothae inventory, and 3,147 carats at Lulo.
In the second half, the company will transition to the higher-margin area in Mothae’s southern pit, and will start mining in the flood-plain blocks at Lulo, which are expected to produce higher average grades. The new area is situated between two high-quality kimberlite areas, the company noted.
“The June half result has put Lucapa on track for a stronger performance in the second half of 2019, as mining at Mothae transitions to higher-margin diamond zones and the production expansion at Lulo is delivered,” the miner said. “The new mining areas…have the potential to increase diamond resources and mine life.”
Image: Diamonds from Mothae. (Lucapa Diamond Company)