Vancouver-headquartered Lucara Diamond Corp achieved strong operating results for the year ended December 31, a reflection of the company’s continued focus on safe, reliable operations, president and CEO Eira Thomas said in a statement.
She indicated that the company’s strategy had yielded increased productivity at lower costs and provided a solid foundation to support Lucara’s next stage of growth – an underground expansion at the Karowe mine, in Botswana, which has the potential to extend its mine life to 2040.
The expansion is also expected to add net cash flow of $1.22-billion and gross revenues of $5.25-billion.
Further, she noted that the company’s second business, Clara Diamond Solutions, its 100%-owned digital sales platform, continued to deliver solid results and was on track to steadily grow third-party diamond supply to the platform over the course of the coming year.
“In 2019, Lucara also continued to explore ways and means to maximise the value it receives for its diamonds. Our ground-breaking agreement with Louis Vuitton in January is another example of how we are delivering on this commitment.
“Through this agreement, we will demonstrate that greater collaboration within the supply chain can unlock value and increase transparency from mine to consumer,” enthused Thomas.
Lucara earned revenues of $192.5-million for the 2019 financial year, above guidance of $170-million to $180-million.
The company achieved a strong operational performance at Karowe, including record production. Total tonnes mined were 9.8-million tonnes; ore and waste mined were 3.3-million tonnes and 6.5-million tonnes respectively; ore processed totalled 2.8-million tonnes; and 433 060 ct were recovered, including 29 990 ct recovered from previously milled material.
Last year was another strong year for the recovery of special diamonds weighing more than 10.8 ct, with 786 special diamonds, totalling 24 424 ct, recovered.
Special diamonds were also recovered in the treatment of historic, pre-X-ray transmission recovery tailings. No further treatment of historic recovery tailings is expected.
Operating cash costs for the period were $31.88 /t processed, below guidance of the $32/t to $37/t.
Operating cash costs per tonne processed were positively impacted on by a combination of higher tonnes processed and lower overall tonnes mined, as planned in 2019, following the completion of a waste stripping campaign in 2018.
Operating cash costs for 2020 are expected to continue to trend between $32/t to $36/t.
Clara completed its first year of operations with a total of 15 sales, 27 customers and volume transacted of $8.4-million.
Clara is poised to achieve significant growth in 2020 with the addition of further customers and third-party production.
Lucara’s adjusted earnings before interest, taxes, depreciation and amortisation increased by 21% year-on-year to $73.1-million.
Net income for the year was $12.7-million.
At period end, Lucara had cash and cash equivalents of $11.2-million and no debt.
For this year, Lucara expects to earn revenues of $180-million to $210-million, as the proportion of carats recovered from the higher-grade M/PK(S) and EM/PK(S) units increases.
The company expects to recover 350 000 ct to 390 000 ct from the processing of 2.5-million to 2.8-million tonnes of ore.
Diamonds sold are expected to be between 350 000 ct and 390 000 ct.
A budget of up to $53-million has been approved for early works related to a proposed underground mine at Karowe.
An investment decision, subject to receipt of all required authorisations and the arrangement of financing, is expected to be made in the second half of this year.