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Lucara Sees Revenue Drop in First Quarter

Miner reports $7 million loss, decline in average price.
May 9, 2018 7:25 AM   By Rapaport News
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RAPAPORT... Lucara Diamond Corp. recorded a loss in the first quarter as lower production and a drop in the average price led to a decline in sales. 

Revenue fell 3% year on year to $25.4 million for the three months ending March 31, with the volume of goods sold down 2% to 63,317 carats, the company reported Tuesday. The average selling price slipped 1% to $401 per carat.

The miner noted a net loss of $7 million for the January-to-March period, compared to a $1.5 million loss over the same time last year. The company attributed the result to lower revenues and higher administrative costs.

Lucara recovered 218 special-size diamonds — those over 10.8 carats — during the first quarter, which the company said was the third-largest quarterly figure since the mine began operations in 2012. In April, the miner unearthed a 327-carat white diamond, as well as a 472-carat light brown diamond.

The company also announced a shift in its sales strategy. Lucara currently holds separate exceptional-stone tender (ESTs) for special-size stones, and regular-stone tenders (RSTs) for diamonds under 10.8 carats. After the June tender is complete, the miner will switch to a “blended-tender process,” which means it will sell regular- and special-size stones at its standard tenders, and offer only the most exceptional diamonds at separate sales events.

Lucara believes this will reduce the amount of time it takes to sell large diamonds, as well as generate a more predictable revenue flow. 

Lucara expects revenue of $170 million to $200 million for 2018, in line with its earlier forecasts. Last year, revenue amounted to $220.8 million, including the $53 million sale of the 1,109-carat Lesedi La Rona.
Tags: exceptional stone tender, lucara, Lucara Diamond Corp, Rapaport News, regular stone tenders
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