Canadian junior diamond miner, Lucara Diamonds, this week sold its first tranche of diamonds from Karowe mine in northern Botswana at a low price than the market expected and the auction has been described in some quarters as disappointing.
The diamond miner sold 26,196 carats in its first auction of diamond output from its Karowe mine for an average of $215 per carat, Lucara said in a statement this week. Analysts expected a price of about $300 a carat.
“The market was really looking for a better diamond price,” said a local analyst who was close to the auction.
Buyers may have been cautious about what is new production from an unknown source. They may want to get a better understanding of how they go through cutting and processing, diamond experts have said.
Reports from Canada say the company’s shares fell the most this week in more than three years after the company sold diamonds in an auction for less than expected by some analysts. Lucara’s share plunged 19 percent to 81 Canadian cents a share on the Toronto Stock Exchange, the biggest decline since 2008. Lucara shares have cumulatively declined by 5.8 percent this year after this week’s fall.
Lucara Diamond Corp reports good progress at its Karowe mine, previously known as AK6 project. The company says activities across the engineering, procurement, construction and development of the operations team advanced the project significantly in 2011.
Lucara says by end of 2011 the Karowe project has advanced in engineering, procurement and fabrication activities were essentially complete and project construction stood at 90 percent complete. Lucara says delays were blamed on the steel industrial action in July in South Africa but commissioning “is expected early in the second quarter of 2012.”
As at the end of February this year, Lucara says the project had achieved more than 1.5 million hours without a lost time in injury. The company says archaeological monitoring of all construction areas continued and no artefacts were discovered on site or at the Boteti housing sites in Letlhakane.
Following the completion of the 25km power line from Orapa sub-station to Karowe mine site late last year which was handed over to Botswana Power Corporation, the mine was switched to the grid power to support commissioning activities and ramp up of full production. As at December 2011 an ore stockpile of 230 000 tonnes had been established to support commissioning.
The process plant operations and maintenance was also given to contractor, Minerals Operations Executive (Minopex) which is working with the operations staff. The operations senior management, technical and support staff were successfully recruited while in Gaborone the sales and marketing offices were completed and senior staff recruited. The company has successfully installed security and stock control systems.