Lucara Diamond Corp. said it will rake in over US$ 200 million in revenues next year buoyed by the continuous recovery of exceptional stones from its Botswana based mine. In a production guidance report for 2016, the company forecasts as annual revenue of between US $200 million to US $220 million, which however excluded the sale of exceptionally high value diamonds such as the recently recovered 1,111 and 813 carat diamonds.
“This baseline revenue is supported by Karowe’s consistent recovery and yearly sales of its current diamond profile, including specials (+10.8 carats) and its exceptional diamonds,” said the company headed by William Lamb.
However, the Canadian company said although it had recovered exceptionally high value stones from the mine and is now focused on the high value south lobe, it is unable to predict when these diamonds will be recovered and sold. The company has lately been the talk of the mining industry with the recovery of 1,111 carat gem quality, Type IIa stone at Karowe mine in Orapa area. The stone, which measures 65mm x 56mm x 40mm, was recovered by the newly installed Large Diamond Recovery (“LDR”) XRT machines.
Lucara is yet to value and price the find with Lamb suggesting the stone could fetch around US$60 million (about P600m). Already a number of buyers have expressed desire to acquire the rare discovery. The mining company has also hinted it was highly un-likely that it will sell its recently recovered 1,111 carats diamond before the end of this year or by the first quarter of 2016.
“The Company therefore considers sales from these diamonds as additional revenue to the baseline US $200 million to US $220 million revenue forecast, which has the potential to significantly increase annual cash flows,” Lucara added.
This will be good news to shareholders as the company has also said a progressive dividend policy will be introduced in 2016 with the aim of maintaining or increasing the Canadian dollar dividend per share each year. The company anticipates it will declare an annual dividend of Canadian $0.06 per share in 2016 to be paid in four equal payments at the end of each financial quarter. However, the amount of any dividend declared will remain at the discretion of the Board of Directors.
“In determining the rate of the total dividend, in Canadian dollars per share, the Board of Directors will consider current operating results and outlook, the need to invest to maintain profitable long term growth, the external environment and any other factors deemed relevant,” it said.
“This dividend policy replaces the Company’s current policy, which contemplates a semi-annual dividend payment and a potential performance related based on performance.”