Lucara Demonstrates Strength: Strong Q4 and 2020 Operational Results

Mining and Exploration
23/02/2021 08:00

In a release detailing its operational results for the COVID year 2020 and the last quarter of that year, Lucara clearly demonstrates its strengths, recording a strong performance despite the pandemic. Total revenue (regular tenders, Clara plus the HB  and Louis Vuitton agreement) amounted to US$125.3m, compared to US$192.5m y-o-y, a remarkably strong performance considering the impact of the COVID-19 pandemic. A strong Q4, with revenue of US$42.4m at an avg US$402/ct marked a global recovery on the rough market, a trend which is continuing in 2021. Year-on-year, the average price per carat did drop from 468 $/ct (2019) to 335 $/ct and total volume of carats sold ended at 373,748ct, compared to 411,732ct in 2019.

In July 2020, Lucara announced an agreement with Antwerp diamond manufacturer HB Antwerp in which all Lucara’s 10.8ct+ diamonds recovered for the remainder of the year, were sold at prices based on the polished outcome plus “top-up” payments once the polished outcome is actually sold. According to Lucara’s release, these top-up payments amounted to US$ 7.2m on top of the US$55.2m achieved under the two (HB Antwerp & Louis Vuitton) agreements, but the company adds that a slower than expected ramp up in both manufacturing and polished sales will likely generate additional revenue in 2021. It is unclear whether the exclusivity agreement continues into 2021, and also applies to the two large, unbroken rough diamonds (341ct and 378ct respectively), in recent weeks.

In January, Lucara announced the renewal and extension of the company’s mining licence for another 25 years, an important milestone for the underground expansion of the Karowe mine.