Recently Lucara Diamond Corporation reviewed 2024 & also presented their outlook for 2025. For the Diamond Market, Lucara reported, the long-term outlook for natural diamond prices remains cautiously optimistic despite current challenges.
While the influx of Angolan rough diamonds and the subdued demand for polished diamonds, especially from China, have led to price corrections, particularly in smaller sizes, the industry sentiment suggests that the market may have reached its bottom during Q4 2024. A gradual recovery is expected to be driven by increasing demand for larger diamonds due to reduced production, and the overall long-term demand for natural diamonds.
While the diamond market is navigating a period of adjustment, it presents opportunities for strategic adaptation and growth. Indian diamond manufacturers are actively responding to evolving demand dynamics, exploring new markets and product segments, while prices of laboratory-grown diamonds have continued to decrease in 2024 with production outweighing demand for these products.
Although De Beers and Alrosa’s recent price adjustments have not yet spurred a significant uptick in demand, they demonstrate a commitment to market responsiveness and price stability. As the industry moves into 2025, buyers are exercising prudent inventory management while holding firm on polished prices, which could lead to a healthier and more sustainable market in the long run.
For their diamond outlook 2025, Lucara Diamond report, this section of the news release provides management’s production and cost estimates for 2025. These are forward-looking statements and subject to the cautionary note regarding the risks associated with forward-looking statements.
The table above reflects the natural variability in the resource production in both recovery and diamond quality which may impact revenue guidance for 2025.
For 2025, the Company’s revenue forecast assumes that 79% of the carats recovered will come from the higher value M/PK(S) and EM/PK(S) units within the South Lobe, the sale of its diamond inventory, and the remaining carats recovered come from the Centre Lobe in accordance with the mine plan, generating revenue between $195 and $225 million. South Lobe material, while lower average grade than the Centre and North Lobes, has a higher weight percentage of +10.8 carat Specials.
In 2025, the Company expects to mine between 1.8 and 2.2 million ore tonnes including waste and moisture content. Mined ore will be processed in combination with stockpiled materials in 2025. The assumptions for carats recovered and sold as well as the number of ore tonnes processed are consistent with achieved plant performance in recent years.
Stockpiled material (North, Centre, South Lobe) from working stockpiles and life-of-mine stockpiles should provide uninterrupted mill feed until 2027 when UGP development ore is scheduled to start offsetting stockpiles with high-grade ore from the underground development. Full scale underground production is planned for H1, 2028.
The underground development is expected to extend Karowe’s mine life to beyond 2040. In 2024, significant progress was made in shaft sinking and lateral development connecting the production and ventilation shafts, with the critical path ventilation shaft being ahead of the July 2023 rebase schedule.
In 2025, capital costs for the UGP are expected to be up to $115 million and will focus predominantly on shaft sinking activities to final depth, equipping of the production shaft and station development. Surface works will focus on permanent winders being installed and cold commissioned. Tendering of the underground lateral development contract along with underground equipment purchases will also be completed in 2025.
Sustaining capital are expected to be up to $13 million with a focus on the replacement and refurbishment of key asset components, in addition to expansion of the tailing’s storage facility and pit steepening activities which will extend the mine’s ability to extract South Lobe material from the pit in 2025.
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