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Lucara projects positive 2018

Publishing Date : 05 December, 2017


Lucara Diamond Corp says it forecasts revenue of between $170million and $200million, excluding the sale of significant high quality exceptional stones. In a statement the Company says diamonds recovered and sold are forecast between 270,000 to 290,000 carats.

“The recovery of these high value diamonds can positively impact the Company’s revenue. To date the Karowe mine has produced and sold the world’s two highest value rough diamonds, the Lesedi La Rona and the Constellation for a combined value of $116.1 million dollars as well as selling 7 rough diamonds in excess of $10 million each,” reads Lucara statement .

In regard to production Lucara says it remains on track to achieve its 2017 production guidance.  “For 2018, the Company is forecasting ore mined guidance at to 2.5 -2.8 million tonnes compared to 2017 forecast of 1.4-1.6million tonnes.  The Karowe mine is forecast to process between 2.4 -2.7 million tonnes of ore, producing between 270,000 and 290,000 carats.”

William Lamb, President and Chief Executive Officer commented, “The Company is forecasting to mine robust volumes from the high value south lobe and continuing waste mining to complete the push back at the Karowe mine to fully access south lobe ore. In 2018, we continue to advance our internal growth projects including the pre-feasibility study for an underground mine at Karowe as well as our exploration portfolio.

Following the successful completion of the MDR and sub-middles projects as well as the expected completion of the cut 2 waste push back in early 2019, operating and capital costs are forecast to be significantly reduced going forward contributing to free cash flow in future periods”.

According to the brief it is expected that the mill feed will comprise up to 85% south lobe ore during 2018. The South lobe grades are lower than the Centre and North lobes resulting in lower diamond recoveries however the overall higher diamond quality and value from the south lobe as compared to the Centre and North lobes results in higher average sales prices and resulting revenues and cash flows.

The company observes that cash costs per tonne of ore processed is forecast to be between $38.0-$4 2.0 per tonne. To fully access cut 2 south lobe ore requires at large volume of waste to be mined which significantly impacts operating cash costs in 2018 as it did in 2017. Operating cash costs, excluding waste mining is expected to be between $21 -$24 per tonne processed. “The strip ratio is forecast at approximately 5.0-6.0 in 2018 before decreasing significantly in 2019 and then forecast at under 2.0 going forward from 2020. The decrease in waste mining is expected to add to free cash flow once the cut 2 push back is complete in 2019.”

Tax rates

Lucara says Boteti’s progressive tax rate computation allows for the immediate deduction of operating costs, including the mining of waste as well as capital expenditures in the year they are incurred. “Based on 2018 revenue guidance of $170 -$200 million and the additional waste mining next year along with the completion of the Company’s capital program, the Company forecasts a tax rate of 22%.” The Company anticipates it will declare an annual dividend in 2018 of Canadian $0.10 per share to be paid in four equal payments in the last month of each financial quarter.



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