Junior Miner Lucara Diamond Corp cashed in from strong rough diamonds demand during the first quarter of 2022 with a 28 percent jump in revenue to $68.2 million ( over P800 million) from $53.1 million( P550 million) in the fist quarter of 2021.
The company which recovers diamonds from its green concept Karowe Mine near Letlhakane, Boteti, said in a quarterly report recently, that the rise in revenue was a reflection of strong rough and polished diamond market fundamentals during the first 3 months of the year 2022.
Lucara said the combination of a strong diamond market, combined with the sale of several higher value rough diamonds in Q1 2022 generated an average price per carat (excluding top-up payments) of $690 for Karowe diamonds sold during the quarter (Q1 2021: $480 per carat).
A total of 186 Specials (single diamonds in excess of 10.8 carats) were recovered, representing 6.9% weight percent Specials (Q1 2021: 6.8%).
Sales volumes transacted on Clara during Q1 2022 totalled $7.0 million, a 17% increase from the $6.0 million in sales volume transacted in Q1 2021. A third-party producer will commence a series of trial sales beginning in Q2 of 2022.
The Karowe Diamond Mine Underground Project continued progressively inthe first quarter of 2022.
The project is expected to extend the life of Karowe Mine to at least 2040, with underground carat production predominantly from the highest value EM/PK(S) unit and is forecast to contribute approximately $4 billion( over P45 billion) in additional revenues, using conservative diamond prices.
The Karowe UGP has an estimated $534 million ( approximately P6 billion) capital cost and a five-year construction period.
Mine ramp up is expected in Q1 2026 with full production from the UGP expected in H2 2026.
The Company is financing the Karowe UGP through a combination of cash flow from operations and project debt.
During the three months ended March 31, 2022, a total of $31.1 million ( over P370 million) was spent on the Karowe UGP development, primarily in relation to engineering, procurement of long lead items and ongoing construction activities, including:
• Pre-sink activities for both the production and ventilation shafts continued with a focus on the setup and transition to main sinking.
• Placement of the ventilation shaft main sinking stage into the shaft column along with placement of the ventilation shaft headgear over the shaft collar.
• Assembly of the production shaft main sink stage with outfitting planned for Q2 in preparation for its installation in the shaft column, while pre-assembly of the production shaft headgear steel continued.
• Cold commissioning of the ventilation shaft kibble winder was completed, with progress on the ventilation shaft stage winder in preparation for winder rope-ups in April, while installation of the production shaft stage winder commenced.
• Completed construction of all 88 tower foundations for the 29 km 132kV transmission line bulk power upgrade and commenced construction at both Letlhakane and Karowe substations.
𝐀𝐜𝐭𝐢𝐯𝐢𝐭𝐢𝐞𝐬 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐔𝐆𝐏 𝐢𝐧 𝐭𝐡𝐞 𝐮𝐩𝐜𝐨𝐦𝐢𝐧𝐠 𝐪𝐮𝐚𝐫𝐭𝐞𝐫𝐬 𝐨𝐟 𝟐𝟎𝟐𝟐 𝐚𝐫𝐞 𝐞𝐱𝐩𝐞𝐜𝐭𝐞𝐝 𝐭𝐨 𝐢𝐧𝐜𝐥𝐮𝐝𝐞 𝐭𝐡𝐞 𝐟𝐨𝐥𝐥𝐨𝐰𝐢𝐧𝐠:
• Execution of the main sinking contract for the production and ventilation shafts
• Completion of the steel headgear structure for the production and ventilation shafts.
• Commissioning of the four main sinking winders.
• Commencement of main sinking for the production and ventilation shafts.
• Continuation of detailed design and engineering of the underground mine infrastructure and layout.
• Commissioning of the 29 km 132kV bulk power supply powerline by December 2022.
Eira Thomas, President & CEO commented: “Lucara begins the year on a positive trajectory, having fully financed and significantly de-risked our growth plans for the underground expansion in 2021 and delivered another strong quarter of operating and financial results in Q1, reflecting solid performance at the mine combined with continued buoyancy in diamond prices. Preparation for main shaft sinking is well underway and anticipated to begin in Q2. Our
multi-channel approach to sales through tenders, Clara and HB continues to mature, creating alignment along the value chain, delivering efficiencies and higher margins. Despite current geo-political challenges, Lucara remains optimistic about diamond prices as natural rough diamond supply constraints continue to manifest globally.”