Lucara Diamond Corp.’s sales rose in 2019 as the miner sold a higher volume of rough from its Karowe mine in Botswana.
Proceeds for the year increased 9% to $192.5 million, exceeding the company’s $170 million to $180 million forecast, it said Monday. A 17% increase in sales volume to 411,732 carats offset a 7% decline in the average price to $468 per carat.
Lucara had a strong year for big-stone discoveries, with 31 of the diamonds it found weighing more than 100 carats. Two were over 300 carats, including the 1,758 carat Sewelô, which the company sold to Louis Vuitton for “millions” in January. Production for the year jumped 18% to 433,060 carats, coming in over the predicted 400,000 to 425,000 carats.
Profit climbed 9% to $12.7 million, the miner said, as operating expenses decreased following improvements to the mine. The company also saw increased sales from its new Clara sales platform, which enables the miner to match buyers with available rough based on their polished needs. Lucara plans to grow the platform further, bringing on additional customers as well as third-party suppliers.
The company also intends to move ahead with its expansion of Karowe to underground mining, it said.
“Our strong operating results for 2019 reflect Lucara’s continued focus on safe, reliable operations, which has delivered increased productivity at lower costs and provides a solid foundation to support our next stage of growth — an underground expansion at Karowe,” noted Lucara CEO Eira Thomas. The project will extend Karowe’s mine life until 2040.
Revenue for the fourth quarter jumped 38% to $56 million. Although sales volume fell 11% to 98,547 carats, that figure was outweighed by a 55% surge in the average price to $568 per carat. Lucara reported profit of $8.7 million for the three months ending December 31, compared with a loss of $6.2 million the previous year.
The miner expects Karowe production to fall to between 370,000 and 410,000 carats in 2020, and sales volume to decline to 350,000 to 390,000 carats. Despite those figures, Lucara expects revenue to rise to between $180 million and $210 million in 2020, as it continues to improve operational performance and increase recovery of rough from the higher-grade M/PK(S) and EM/PK(S) areas of Karowe’s south lobe.
Image: Diamond sorting at the Karowe mine. (Lucara Diamond Corp.)