High quality diamond producer Lucara Diamond has forecast 2016 revenues of between US$200 – 220 million excluding the sale of its two exceptional diamonds.
At the recent annual resource sector conference, Lucara Chief Operations Officer (COO) Paul Day said they expected to sale between 340,000 – 380,000 carats, highlighting that they project operating costs of $33.5 – $36.5 per tonne processed. He also spoke of sustaining capital of up to $11.0 million which includes $1.5 million for mill relining machine and $1.5 million for office relocation. Regarding the company’s exploration he said two prospecting licenses covering 5 known kimberlite occurrences were awarded to Lucara (Boteti) adding that an exploration budget of $7 million is on the cards.
“Final sale of the Lesedi La Rona will be a live auction at Sotheby’s London on June 29, 2016,” said Day.
He stated that Lesedi La Rona was recovered in November 2015 weighing 1,109 carats post cleaning adding that it was the second largest gem quality diamond ever and the largest in more than 100 years. Day stated that the exceptional diamond was showcased in major cities around the world and that they have partnered with Julius Baer and Sotheby’s.
Regarding Karowe mine, he said 10,000m resource drilling campaign commenced to upgrade inferred resource to indicate below 400m. He also revealed that the conceptual UG study undertaken in 2015, and advanced geo-tech studies are underway.
“Resource continues to deliver a significant quantity of stones greater than 10.8 carats with more than 727 being recovered during 2015 at an average stone size of 36.7 carat/stone,” he said.
He further stated that during 2015, 47 diamonds larger than 100 carats were recovered including 20 larger than 200 carats of which 7 were larger than 300 carats.
He spoke of consistent delivery of large and exceptional stones generating strong free cashflow as well as attractive and sustainable growth potential in the prospecting licenses. He also said the company has a strong and growing balance sheet for potential M&A activity.
“Our safety performance for the quarter was excellent with safety and health lost time injury frequency rates for 2016 of zero measured per 1,000,000 hours,” he said.
Regarding prospecting license of Block A, Day stated that bulk sampling activities at BK02 were completed in the first quarter and processing of the surface sample was completed during Q1 2016. He further said the BK02 diamond results will be released once processing of the sample is complete.
“In 2015 the recovery of 165 diamonds larger than 10.8 carats of average stone size of 27.9 carats per stone including 8 diamonds larger than 100 carats was another highlight,” Day stated.