Lucapa Signs Lulo Polishing Agreement with Graff
January 30, 20
(IDEX Online) - Lucapa Diamond Company Limited has signed an agreement with Safdico International, a subsidiary of Graff International, to cut and polish a portion of rough diamonds from the Lulo alluvial mine. Safdico can purchase up to 60 percent of production from Sociedade Mineira Do Lulo (SML), which Lucapa operates and in which it holds a 40-percent share. Under the terms of the agreement, once procurement and manufacturing costs are deducted, any profits generated from the sale of the polished diamonds will be shared equally between SML and Safdico. Safdico has purchased ~4,900 carats of run of mine rough diamonds from SML under this commercial partnership and SML will receive its first share of the partnership profits from Safdico this quarter. The new revenues streams come as SML completes a self-funded $12 million capital investment program designed to expand total group production to >60,000 carats in 2020. Lucapa said the production increase, coupled with the new revenue streams generated from the cutting and polishing agreement with Safdico, will enable SML to generate higher returns for its partners and make more regular loan repayments.