TORONTO (miningweekly.com) – Southern Africa-focused emerging diamond producer Lucara Diamond Corp reported net earnings of $22.7-million, or $0.06 a share, for the three months ended June 30, saying it had an “exceptional” first half of the year with sales proceeds of more than $80-million from over 230 000 ct sold.
The June quarter’s performance is an improvement on the $6.17-million net income reported in the March quarter and the loss of $7.6-million a year earlier.
During the quarter, the company, which operates the Boteti Karowe mine in Botswana, completed its first large and exceptional stone tender along with two regular tenders achieving gross proceeds of $49.3-million. Proceeds for the year to date were $81.8-million.
The second-quarter diamond sales included a large and exceptional stone tender held in May, consisting of 15 single stone lots. All stones were sold for gross proceeds of $24.6-million, or $30 184/ct, with a combined weight of 815 ct.
The company's two regular tenders during the second quarter totalled 101 637 ct, achieving winning bids of $24.7-million, or $243/ct.
The average value of run-of-mine diamonds recovered and sold during the quarter was $485/ct.
Lucara said it continued to recover a number of significant gem-quality diamonds from its run-of-mine (RoM) production after the quarter ended, adding that it was planning its second exceptional stone tender in September.
Operating price per carat sold was $102 during the quarter compared with $86/ct sold in the first quarter. The increase was, however, in line with budget and the company's mine plan and reflected lower grades processed as the mine transitioned from the north lobe to the upper benches in the centre lobe, as well as the planned increase in ore and waste mined.
"Following the first large and exceptional stone sale, the Karowe mine has continued to produce a high proportion of large stones and a second exceptional stone sale will be held in September featuring 16 diamonds, including a pink stone and five stones which are over 100 ct each. The proceeds from this sale are expected to further strengthen the company's overall cash position,” president and CEO William Lamb said.
Market analysts at SP Angel, in London, said the company’s numbers were good and followed on from their previous update of a strong tender.
“The company is finding exceptional stones which are pushing up the carat value. Cash flows look strong, enabling them to pay down debt as scheduled. With more large stones recovered over the quarter going into the September tender, we expect another strong result,” analyst John Meyer wrote in a note to clients.
The Karowe mine is expected to mine 2.5-million tonnes of ore and to sell 420 000 ct of diamonds in 2013.
Lucara said it expected to hold three more regular RoM diamonds tenders and at least one large and exceptional diamonds sale during the remainder of the year.
The September sale is expected to comprise about 78 000 ct, with the two sales in the fourth quarter averaging 53 000 ct of diamond each, and there would be client viewings conducted in both Gaborone, Botswana, and Antwerp, Belgium.
Karowe's operating cash costs were expected to total about $23/t treated, in line with previous guidance. Capital expenditures for 2013, excluding any final project retention payments were expected to be about $5-million, which was in line with the previous guidance.
The Mothae diamond project, in Lesotho, remained on temporary care and maintenance during the quarter and the company was reviewing a number of development options.