Saturday, April 13, 2024

Karowe mine anchors Lucara’s 2018 performance


Canadian miner and Botswana Stock Exchange listed company, Lucara, says 2018 was a record year for recovery of specials, as its flagship asset Karowe mine continues to impress.

In the latest full year financial results for 2018, the company’s revenue fell 20 percent to $176.2 million as a result of a decline in average sales price per carat impacted by higher recovery of lower value diamonds. While the company has unearthed quality gems, some have been kept in inventory to be sold through Lucara’s subsidiary Clara.

The Botswana based Karowe mine’s reputation as a source of high quality gems endured as it achieved strong operational performance last year, meeting or exceeding guidance in all areas: total tonnes mined came at 18.1 million against guidance target between 15.5 ÔÇô 18.7 million. Ore processes totaled 2.6 million against the targeted 2.4 million to 2.7 million, while 366, 086 carats were recovered, exceeding the revised guidance of 325, 000 to 350, 00.

“2018 was a record year for the recovery of Specials (single diamonds in excess of 10.8 carats) with 829 stones totaling 24,793 carats recovered, including 33 diamonds in excess of 100 carats, of which 5 stones were in excess of 300 carats,” the company said in a statement on Friday.

In 2018, a total of 829 stones were recovered representing 6.8 weight percent of total carats, the largest carat tally for Specials in Karowe’s history and consistent with the Resource Model for Karowe.  Overall production in 2018 was positively impacted by the processing of South Lobe ore, the prolific part of Karone mine, Lucara said.

The company further said while 2018 was a record year for the number of Specials recovered, the overall average price for Specials sold in 2018 was lower than in previous years due to the quality of some of the larger Specials recovered. Diamond prices are driven by: weight, colour, quality and shape.

Still, the company says it remains very confident that high quality, large stone recoveries will continue throughout the mine life.  To date in 2019 alone, two top white gem diamonds (240 and 127 carats) and one high white gem diamond (223 carats) have been recovered, indicating a strong start to the year.

“The investments we made in our business in 2018 resolved the waste stripping bottleneck, advanced and significantly de-risked our plans for underground expansion at Karowe and bought us a complimentary new technology business that has the potential to contribute significant future cash-flows.  Operations at Karowe are stable, plant reliability has never been better, and with the waste stripping campaign largely complete, we are focused on driving efficiencies, reducing costs and maximizing revenues,” said Eira Thomas, Lucara’s president and CEO.

“Further, 2019 is off to a strong start with the recovery of several, +100 carat, high quality gem diamonds which will be offered for sale at our first tender of the year, scheduled to close on March 7, 2019.  For Clara, we are excited to be steadily ramping up on sales and we are expecting to add third-party rough production to the platform before year-end.”  

The company has maintained a positive outlook for this year, bolstered by significant waste stripping campaign that began in 2017, thus lowering mining costs for 2019. Consequently, Lucara anticipates revenues between $170 million and $200 million, with diamond production expected to fall between 300,000 and 320, 000 carats.

The Canadian miner also announced budget of $14.8 million has been approved to complete a feasibility study that was initiated in 2018, evaluating the potential for an underground mining operation at Karowe. 


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