Lucara loses P5.4 m due to Covid- 19
Lucara Diamond Mine recorded P5.4 million losses in the third quarter as uncertainties presented by the Covid- 19 forced the company not to tender its production after the pandemic outbreak end of March.
In its quarterly report ended September 2020, the Canadian company pointed out that although the mine has remained fully operational throughout the Covid- 19 pandemic, Lucara made a deliberate decision not to tender any of its + 10.8 carat production after early March 2020 amidst the uncertainty caused by the global crisis and the significant weakness observed in the rough diamond market.
Lucara’s revenue decreased to $ 82.9 million compared to $ 136.5 million in the same period last year. Lucara President and Chief Executive Officer, Eira Thomas said the reduction in revenue results from a combination of a 15 percent decrease in the number of carats sold. The other reason was the deliberate decision not to sell + 10.8 carats diamonds in favour of entering into a committed supply agreement for these diamonds for the remainder of the year.
Moving into the third quarter, Thomas said they are pleased to see a stabilisation of the rough diamond market and an improvement in consumer demand for polished diamonds in both Asia and the US markets. She said Karowe mine continued to perform well, delivering safe, reliable production in line with the plan. “In Q3, we began recognizing revenue from our new sales agreement with HB Antwerp and though it is still in its infancy, Lucara is now receiving regular, predictable revenue for its + 10.8 carats diamond using a superior pricing mechanism based on estimated polished outcomes less a commission and the cost of polishing,” she said.
Capital allocated for the underground expansion program at Karowe Mine has been reduced to $ 22 million from the original $ 53 million. “The 2020 program objectives have been rescoped to focus on long lead time critical path items, detailed engineering and design and limited site activity focused on earth works and geotechnical studies,”
The company has also entered into a second
strategic collaboration with Louis Vuitton, and HB Antwerp for the planning and polishing of the exceptional, 549 carats white gem diamond referred to as Sethunya, recovered from Karowe in February 2020.“Sethunya is one of the highest quality exceptional diamonds ever recovered at
Karowe and we believe this partnership is a unique opportunity to showcase it to the world and ultimately transform it into an extraordinary bespoke, polished diamond collection, catering exclusively to Louis Vuitton’s global customer base.”