Tuesday, August 3, 2021

Lucara sparkles in 2021 with yet another huge gem

The Canadian miner Lucara has recovered yet another massive gem at its prolific Karowe mine, which continues to be a source of large quality gems, aided in part by the company’s technology that allows it to extract diamonds without breaking them up.

On late Thursday, Lucara excitedly announced the recovery of an unbroken 341 carat top white gem quality diamond from its wholly owned Karowe mine.

The gem was recovered over the holiday period from milling of ore sourced from the south western quadrant of the South Lobe M/PK(S) unit. The recovery of large gem quality diamonds from the M/PK(S) unit of the South Lobe is in line with expectations and historical South Lobe recoveries, the miner said in a statement.

“Lucara is extremely pleased to be starting off 2021 with the recovery of a 341-carat high quality white gem diamond that builds on previous historic recoveries which include the 549 carat Sethunya, 998 carat, 1758 carat Sewelô, the 1109 carat Lesedi La Rona and the 342 carat Queen of the Kalahari. The 341-carat diamond represents the 54th diamond greater than 200 carats to be recovered from Karowe since 2015,” said Lucara’s chief executive officer Eira Thomas.

The Karowe mine has been a profitable acquisition for Lucara after it bought 70 percent of the mine in 2009 from De Beers for just $49 million.

It later acquired 100 percent ownership of the mine when it bought African Diamonds for $70.3 million in stock. Since then, Karowe mine has been a rare source of exceptional diamonds with its consistent recovery of large high value diamonds. Although it produces less than 1 percent of world’s diamonds, the mine is recovering more than 50 percent of the world’s diamonds larger than 100 carats.

Karowe mine, commissioned in July 2012, has been responsible for a total of 63 diamonds in excess of 200 carats which have been recovered, including 13 diamonds larger than 300 carats in size. Lucara has hinted that there could be even bigger diamonds hidden under the belly of Botswana, and plans are ongoing to turn Karowe into an underground mine.

“The consistent recovery of these large diamonds is a testament to the continued strong resource and plant performance at Karowe and underpins our rationale for moving forward with the underground expansion program that will see mining continue for at least another 13 years after the open pit ceases operations in 2026. We look forward to a productive and busy 2021,” said Thomas.

Following Covid-19 containment measures that disrupted the diamond value chain last year, Lucara slashed the budget for the underground expansion program to $22 million from the original $53 million budget. During the nine months ended September 2020, $10.4 million was spent on these project execution activities.

In July 2020, Lucara unveiled an unusual partnership agreement with HB Antwerp, entering into a definitive supply agreement for the remainder of 2020, for all of the diamonds produced in excess of 10.8 carats from the gem quality churning Karowe mine whose high value diamonds have historically accounted for approximately 60 to 70 percent of Lucara’s annual revenues.

Under the supply agreement with HB Antwerp, Lucara’s diamonds greater than 10.8 carat production are being sold at prices based on the estimated polished outcome of each diamond, determined through state of the art scanning and planning technology, with a  true up amount payable to Lucara on actual achieved polished sales in excess of the initial estimated polished price, less a fee and the cost of manufacturing, the company said in its third quarter financials. The unique pricing mechanism is expected to deliver regular cash flow at superior prices for this important segment of production profile.

In November, Lucara entered again into a second strategic collaboration with Louis Vuitton, the world’s leading luxury brand, and HB Antwerp for the planning and polishing of the exceptional, 549 carat white gem diamond referred to as “Sethunya” which was recovered from the Karowe Mine in February 2020.

The first collaboration was unveiled in January 2020, with Lucara, HB and Louis Vuitton partnering to cut and polish the 1,758 carat Sewelô diamond recovered from Karowe in April 2019.

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