Lucara reports lower Q1 revenue on back of global economic downturn
Botswana-focused Lucara Diamonds has met its key operational metrics for the first quarter of the year, with 89 640 ct recovered and operating cash costs of $26.65/t of ore processed being well below the expected range of between $32.50/t and $35.50/t.
This compares to 83 917 ct recovered in the first quarter of last year.
Lucara generated $20.4-million of cash flow from its operating activities at the Karowe diamond mine, in the quarter ended March 31.
The Canada-headquartered company has continued to focus on the Karowe underground expansion project, particularly with main shaft sinking activities in the ventilation and production shafts, as well as providing the mine with electricity from the new Karowe substation.
CEO and president Eira Thomas says the company will, before the end of the second quarter, publish an update to the schedule and budget of the underground project, in response to slower-than-planned ramp-up to expected sinking rates, as well as to account for time anticipated for future grouting programmes.
Revenue was lower at $42.8-million in the first quarter of the year, compared with $68.2-million of revenue generated in the first quarter of last year, owing to a change in ore mix processed and diamond pricing weakness amid global economic and geopolitical uncertainty.
Commenting on market conditions, Thomas says despite a positive longer-term outlook for natural diamonds, softer diamond prices observed in the latter half of 2022 have continued into 2023, as global economic concerns prevail.
“Prices are beginning to show stabilisation as China begins to open up after various Covid-19 lockdowns last year, which is expected to continue towards the end of the year,” she explains.
Lucara remains on track to recover between 395 000 ct and 425 000 ct for the full year.
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