JOHANNESBURG (miningweekly.com) - Botswana-focused miner Lucara Diamond has acquired Clara Diamond Solutions, a company whose primary asset is a secure, digital sales platform aimed at transforming how rough diamonds are sold.
Lucara noted that the platform would unlock value for diamond producers and manufacturers alike.
"Clara uses proprietary analytics, together with cloud and blockchain technologies, to modernise the existing diamond supply chain, driving efficiencies and ensuring diamond provenance from mine to finger," the dual-listed company said in a statement.
The $29-million acquisition would be settled through the issue of 13.1-million Lucara shares upfront, resulting in a 3.7% dilution to the diamond miner's existing share capital.
Further staged equity payments totalling 13.4-million shares are payable upon the achievement of performance milestones related to revenues generated through the platform.
Clara is a commercially scalable, digital platform that applies computing algorithms to match rough diamond production to specific polished manufacturing demand on a stone by stone basis.
It allows buyers to source rough diamonds tailored to specific polished diamond demand resulting in improved margins for both buyers and sellers. The platform also eliminates dependency on a fixed sales cycle, reducing unwanted carrying costs for stakeholders.
Lucara intends to commercialise the Clara platform in the coming months using a selection of the diamond production from the company's flagship Karowe diamond mine, in Botswana.
Thereafter, Clara will be scaled to accommodate diamond uptake from a variety of sources across the supply chain.
Testing on the platform has demonstrated the potential to unlock greater than 20% of value throughout the diamond pipeline to the benefit of all participants. Clara's revenue model will be based on capturing a portion of this incremental value.
Lucara has also agreed to a profit sharing mechanism whereby the developers of the Clara technology, and the management of Clara, will retain 13.33% and 6.67%, respectively, of the yearly earnings before interest, taxes, depreciation and amortisation generated by the platform, to a maximum of $25-million a year, for ten years.
"The acquisition marks an exciting milestone for the company and is consistent with our approach of looking well beyond existing industry practice, adopting innovation and progressive development as a key pillar of our success," Lucara outgoing CEO William Lamb said.
Lucara on Monday announced that Lamb would step down from the company's board to retire and would be succeeded by Eira Thomas, a founder and director of the company.
"I am proud to have served as Lucara's CEO for almost a decade, during which time Karowe was taken from feasibility through to a world-class operating diamond mine.
Thomas, as the new CEO, would be well supported by a focused and experienced team at Karowe as the miner looks to expand the mine underground.
Lamb would remain closely associated with the company in an ongoing role as a technical adviser as it embarks on this phase.
Thomas brings more than 25 years' experience in the mining industry, including 16 years with Aber Diamond Corporation, where she served in ever senior roles from initial discovery as a geologist to exploration VP and ultimately board director.
She was cofounder of Stornoway Diamond, serving first as CEO and then as executive chairperson. There she led the acquisition of the Renard diamond deposit, which subsequently became Quebec's first diamond mine.
In 2007, she founded Lucara with partners Lukas Lundin and Catherine McLeod Seltzer, who has also been appointed a Lucara director.
Thomas most recently served as CEO of Kaminak Gold Corporation which was acquired by Goldcorp for $520-million in 2016.