Lucara Diamond Corp. Reports First Quarter Revenues Down By Half Y-O-Y

(IDEX Online) – Lucara Diamond Corp. reports first quarter revenues of $26.1 million, or $405 per carat, compared with $50.6 million and $649 per carat for the same period last year, and a cash balance of $43.5 million.

The decrease in revenues in Q1 2017 compared to Q1 2016 was "due to a lower volume of carats being sold and a decrease in the carat weight of specials sold. A larger volume of +10.8ct specials were sold in Q1 2016 (6,936 carats) compared to Q1 2017 (2,379 carats), which reflected the above average recoveries of specials during Q4 2015. The average prices in the Q1 2017 tender are amongst the top three in terms of $/carat achieved over the 30 Lucara regular tenders held to date. The decrease in overall carats sold in Q1 2017 compared to the prior year reflects the processing of lower grade stockpiles during a transition of mining contractors at Karowe.

Operating costs were $19.9 per tonne processed (Q1 2016: $25.3 per tonne)

The results "reflect the overall timing of the company's sales tenders, with a single tender held during the first quarter. The company maintains its 2017 revenue forecast of $200-$220 million, with 80% of its revenue forecast from the company's exceptional stone tenders and the sale of specials (>10.8 carats) in its regular tenders. The company has consistently recovered these specials (>10.8 carats) and there remains strong demand for these diamonds."

Its 11th Exceptional Stone Tender will close on May 11. The tender includes 15 diamonds weighing 1,765 carats for an average of 117 carats per stone with six of the offered diamonds weighing more than 100 carats.

William Lamb, President and Chief Executive Officer commented: "With a strong focus on operational delivery we ensured our new mining contractor, Aveng Moolmans, successfully mobilized and ramped up operations at Karowe. Costs remain strongly controlled as we advance our capital projects and resource upgrade work. Q1 sales were in line with expectations, following recovering diamonds from our stockpiles as Aveng Moolmans fully mobilized at the Karowe mine. Our Exceptional Stone Tender, planned for Q2, positions Lucara well for the year and with mining now ramped up and with a renewed focused on south lobe ore, we anticipate the delivery of strong cash flow returns."

Capital expenditure in 2017 is forecast at between $33 million-$35 million.