The company said for the quarter ending September, its sales picked to $56.9 million outperforming market expectations that diamond revenues will sink due to a subdued diamond market.
A quarterly report released by the Canadian company noted that the strong financial performance is a derivative of infused operational efficiency that has allowed the diamond miner to cut down on costs while enhancing productivity. “The third quarter results for the company were very good when considering market dynamics and the current state of the diamond sector.
During this period of market weakness, the company is focusing on operational efficiency,” it said. Lucara, which predominantly sells its Karowe Mine’s production through quarterly tenders, as well as the Clara diamond sales platform, a block chain-powered sales channel as of Q3, processed a million tonnes of ore that resulted in the extraction of over 98, 000 carats value of diamonds.
“Ore and waste mined of 0.9 million tonnes and 1.0 million tonnes respectively. Zero point seven (0.7) million tonnes of ore processed. A total of 98, 311 carats recovered at a recovered grade of 13.6 carats per 100 tonnes of direct milled ore,” the report added.
Market expectations for diamond sales have been revised downwards by industry specialists for this year due to mostly high inventory levels of polished diamonds in the midstream, which negatively affect demand for rough diamonds coupled with ongoing global economic uncertainties, particularly in major markets such as the United States (US). Meanwhile, ongoing global economic uncertainties, especially in major markets such as the US, a softer than expected contribution from China, stiffer competition from synthetics and the industry’s reputational knock from the continued flow of sanctioned Russian diamonds into the market, have worsened the industry’s challenges this year. Rough diamond marketing companies such as Okavango Diamond Company (ODC), saw their revenues in the first six months of the year drop by nearly 60% compared to the same period last year, as the rough diamond industry experienced a sharp downturn last seen four years ago.
The ODC will not hold its November sale of rough diamonds and could also cancel the December one, in order to help reduce oversupply in the global market. Lucara has been on a rampant investment on its underground project, which is expected to extend mine life to at least 2040 and is forecast to contribute approximately $4 billion in additional revenues using conservative diamond price assumptions, which are un-escalated and exclude exceptional stone revenues. “During the three months ended September 30, 2023, a total of $20.3 million was spent on the Karowe Underground project development, primarily in relation to ongoing shaft sinking activities,” the report revealed.
