Lucara Diamond Corp. yesterday (May 2) today reported first quarter revenues of $26.1 million, or $405 per carat, which represents nearly a 50% drop from the $50.6 million earned at $649 per carat in Q1 2016. The company explains the results as follows: "The decrease in revenues in Q1 2017 compared to Q1 2016 was due to a lower volume of carats being sold and a decrease in the carat weight of specials sold. A larger volume of +10.8ct specials were sold in Q1 2016 (6,936 carats) compared to Q1 2017 (2,379 carats), which reflected the above average recoveries of specials during Q4 2015. The average prices in the Q1 2017 tender are amongst the top three in terms of $/carat achieved over the 30 Lucara regular tenders held to date. The decrease in overall carats sold in Q1 2017 compared to the prior year reflects the processing of lower grade stockpiles during a transition of mining contractors at Karowe." The miner reported a net loss of $1.5 million, having turned a profit of $17.1 million a year earlier. Nonetheless, the Board of Directors has declared its second 2017 quarter dividend of CDN 2.5 cents per share to be payable on June 15, 2017.
From a financial standpoint, EBITDA was $4.9 million for the period (Q1 2016: $30.7 million), with a Q1 cash position of $43.5 million (FY 2016: $53.3 million) and operating costs at $19.9 per ton processed (Q1 2016: $25.3 per ton). Earnings per share for the quarter was nil (Q1 2016: $0.05 earnings per share), largely due to the timing of the company's sales, they report. Lucara had one sale during Q1 which will be followed by two sales in Q2 including their first exceptional stone sale in 2017. The tender includes 15 diamonds weighing 1,765 carats for an average of 117 carats per stone with six of the offered diamonds weighing in excess of 100 carats. Lucara's quarter-end cash balance was $43.5 million. The decrease in cash position from the 2016 closing balance of $53.3 million was primarily due to investment of capital projects of $5.0 million and a dividend payment of $7.2 million.
From an operational standpoint at it Karowe Mine, Lucara notes that Karowe's waste mining, ore processing and carats recovered were in line with forecast. Ore mined was below forecast due to the impact of extraordinarily heavy rains during Q1, but has increased in Q2 and is expected to achieve 2017 forecast. Karowe's new mine contractor Aveng Moolmans commenced mobilization to the Karowe mine in February and is expected to achieve full production during Q2, while the Mega Diamond Recovery and the sub middles XRT project are advancing and are forecast to be completed on time and on budget in 2017. Lucara's drilling program at the Karowe Mine to test the AK06 kimberlite at depths below 400m was completed in February 2017. The resource update is expected to be complete in Q4, 2017.
William Lamb, President and Chief Executive Officer commented "With a strong focus on operational delivery we ensured our new mining contractor, Aveng Moolmans, successfully mobilized and ramped up operations at Karowe. Costs remain strongly controlled as we advance our capital projects and resource upgrade work. Q1 sales were in line with expectations, following recovering diamonds from our stockpiles as Aveng Moolmans fully mobilized to the Karowe mine. Our Exceptional Stone Tender, planned for Q2, positions Lucara well for the year and with mining now ramped up and with a renewed focused on south lobe ore, we anticipate the delivery of strong cash flow returns".
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