Karowe’s large, high value diamonds have historically accounted for approximately 60% to 70% of Lucara’s annual revenues. In September 2023, Lucara terminated the definitive sales agreement executed with HB Antwerp (HB) in November 2022 (for all +10.8 carat diamonds recovered from Karowe). Further, the Company plans to sell its +10.8 carat production through its established sales channels, subject to pre-approval from the Government of the Republic of Botswana.
For the three months ended September 30, 2023, the Company recorded revenue of $38.4 million from the HB agreement (inclusive of top-up payments of $0.9 million), as compared to revenue of $27.1 million (inclusive of top-up payments of $9.0 million) for the three months ended September 30, 2022.
The third quarter saw several high value stones recognized through the HB sales agreement accounting for much of the 107% increase in initial revenue of $37.5 million. The remaining increase in revenue was due to the 26% increase in carats sold through the HB agreement versus the comparable quarter. The product mix delivered in Q3 2023 was predominately from the South Lobe ore body, with some contribution from the Centre Lobe (Q3 2022 – 100% South Lobe ore).
Recovered Specials equated to 6.8% of the weight percentage of total recovered carats from ore processed during Q3 2023, with 84% of carats recovered coming from the South Lobe and 16% recovered from the Centre Lobe (Q3 2022: 7.1%; 100% South Lobe ore). Natural variability in the quality profile of the +10.8ct production in any production period or fiscal quarter results in fluctuations in recorded revenue and associated top-ups. This result is consistent with the resource model and expected.
The large stone diamond market fundamentals continued to support healthy prices from the multi-year highs observed at the peak in Q1 2022, despite an overall softening of demand in the market.
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