Lucara's $3.2m Loss Threatens Expansion

(IDEX Online) - Lucara has been forced to re-think a major expansion of its Karowe mine in Botswana after COVID-19 left it with first quarter losses of $3.2m.

That compares with a profit of $7.4m for the same three months last year.

The Canada-based miner has continued full production throughout the coronavirus crisis at Karowe, a mine famed for exceptional type IIA diamonds, and for having produced two 1,000+ carat diamonds.

But quarterly revenue and yield per carat declined sharply compared with Q1 2019 - revenue $34.1m, down from $48.7m, and $396 per carat, down from $512. Production was in line with forecasts at 91,536 carats.

The poor performance has cast doubt on a proposed $514m underground expansion program and a five-year period of development.

"Given the present uncertainty related to our 2020 revenue forecast, this program is being re-scoped and reduced to focus on critical-path items through the remainder of the year," the company said.

Eira Thomas, president and CEO said: "Karowe continues to operate safely and at full production.

"Demand for our product, however, continues to be weak and Lucara is necessarily focused on cost management and capital discipline through this period of uncertainty."

Pic of Karowe mine, courtesy Lucara