Lucapa Achieves Record Production in 2019

Mining and Exploration
06/01/2020 14:55

Lucapa Diamond Company today announced that in 2019 the miner smashed its previous annual high in group production, recovering 49,120 carats compared to 19,196 carats last year. Following their final rough-diamond sale of the year, where the company earned US$6.4 million (A$9.3 million) for their diamonds from the Lulo alluvial mine in Angola and the Mothae kimberlite mine in Lesotho, Lucapa's total 2019 sales of Lulo and Mothae diamonds reached US$55.0 million (A$79.0 million), more than doubling their entire earnings of US$26.4 million a year ago.

The ASX announcement notes that the miner pushed its production and operational efficiencies at the Mothae and Lulo mines in the December 2019 Quarter to counter the decline in global rough diamond demand, which has impacted prices and revenues for diamond producers. The average price per carat acheived in 2019, $1,127, was 16.5% lower than the $1,313 per carat achieved in 2018 and 48% lower  than the $1,669 realized in 2017. This decined was in part due to the addition of Mothae diamonds ($597/carat average) to the Lulo mix, but was also a result of the overall pricing climate. Lucapa also significantly increased its recovery of 'specials' (diamonds weighing 10.8 carats or more) to 357 compared to 214 last year and 238 in 2017. The 'specials' included a combined total of five diamonds larger than 100 carats.

The production spike was driven by the company's Mothae mine in Lesotho. Mothae processed record tonnes of orre and recovered a record grade to produce a record 9,837 carats in the fourth Quarter for a 2019 total of more than 30,000 carats in its first year of production – 45% ahead of plan. The Lulo alluvial mine produced 4,170 carats in the fourth Quarter despite disruptions caused by near record rainfall towards the end of the year and a cessation in operations during the period as a result of labor action, which has since been resolved. This resulted in annual production of more than 19,000 carats, within 1% of the previous year’s result despite the disruptions.

"While 2019 was a challenging year for all diamond producers in respect of sales prices," they note, "the year ended on a more positive note with a turnaround in mid-stream demand and prices - as evidenced in a number of rough diamond tenders and sales - and strong holiday season jewellery sales in America."