Lucara Revenue Hit by Ore Mix and Weak Market
May 15, 23
(IDEX Online) - Lucara reported a drop of almost 40 per cent in its Q1 sales of diamonds from its Karowe mine, in Botswana.
The Canadian miner said rough revenue fell from US$67.2m in Q1 2022 to $41.3m, but it sold more carats - up from 80,295 to 83,374, a reflection of ongoing weakness in the market.
"As anticipated, Q1 delivered lower revenues than in the comparative period, owing to the change in ore mix processed and diamond pricing weakness resulting from continued geopolitical and economic uncertainty," said Eira Thomas, president and CEO.
She said, however, that the outlook for the year remained unchanged as the largest influence on its revenue in Q1, ore mix, returns to higher contributions.
Lucara has extended its agreement with HB Antwerp to sell its specials (+10.8-cts) for the next 10 years. They have historically accounted for approximately up to 70 per cent of its annual revenues.
In Q1 the HB agreement accounted for $24.5m of Lucara's total $41.3m diamond sales.
In a statement the company said: "Despite a positive, longer-term outlook for natural diamonds, anchored on improving fundamentals around supply and demand, softer diamond prices observed in the latter half of 2022 have continued into 2023 as global economic concerns combined with geopolitical uncertainty, including the ongoing conflict in Ukraine continue to play out in the market, particularly in North America."
The mine, which opened in 2012, is the only one ever to yield two 1,000+ carat diamonds — the 1,758-carat Sewelo in 2019 and the 1,109-carat Lesedi La Rona in 2015, which sold for US$53m.
Pic of Karowe mine courtesy Lucara