Lucapa Diamond Company presented its quarterly activities report for the period ended 30 September 2023 (the Q3). Managing Director, Nick Selby, commented: “Mothae continues to perform strongly and had a very positive Quarter. At Lulo, carat recovery and revenue were down for Q3 mainly due to lower grades being mined and high value stones being held over for the Q4 tender which has resulted in a timing issue for the flow of funds.
However, as the recent tender results confirmed, large, high-quality diamonds such as those produced at Lulo and Mothae are still attracting strong prices and are in high demand compared to the smaller goods used by mainstream jewellers.”
The dry season in Angola saw mining operations focused on the lizeria areas. The volume of material processed ended the Quarter up 6 percent on the previous corresponding period at 141,969m, but due to mining of lower grade areas versus the corresponding period in 2022, carats recovered was lower at 7,578.
Some of the notable recoveries during Q3 were a 66-carat pink diamond and a 96-carat white. A 123-carat diamond was also recovered post-Quarter end, on 1 October 2023. Production was interrupted for approximately two weeks during Q3, due to an illegal work stoppage, which was successfully resolved with the signing of a new agreement with a worker’s union valid until 2026. This event does not affect the full year guidance which continues to be on-track.
There were two run-of-mine sales during the period which sold a total of 8,657 carats with a third sale of approximately 2,300 carats being postponed to Q4. Revenue across the two sales totalled US$9.1 million (A$13.6 million) at an average rough price of US$1,052/carat (A$1,573/carat). Revenue was down on the previous corresponding period due to seven of the high value stones being held over for the tender, which took place post-quarter end.
This resulted in a 56% rough diamond revenue deficit being realised when compared to the Q3 22 which is entirely due to timing, as the revenue from the sales held over will be recorded in Q4. This timing of the sales was the main driver behind the negative variances recorded in Tables 1 and 2 above.
The October tender featured seven exceptional diamonds totalling 535 carats and averaged US$29,401 per carat for a total of US$15.7 million (A$24.5million).
Lulo 2023 Guidance said, as at the end of Q3 2023, SML is still tracking in line with operational guidance as per Table 3. Therefore, the full year guidance is maintained.
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