Canadian rare diamonds powerhouse Lucara has posted positive revenue figures from its third quarter sales tender, well within the company’s projections. The BSE listed top gem producer this week said figures were thus far looking impressively good for the company when taking into account current global rough diamonds slow market performance.
Lucara through its wholly owned subsidiary, Lucara Botswana runs and owns Karowe Mine, as the sole shareholder. Karowe is located in the outskirts of Letlhakane Village in the Boteti district of Botswana. On August 29th Lucara closed its third diamond tender sale of the year. The company says despite challenging market conditions, the tender was extremely well attended with a total of 123 companies attending and 47 companies winning one or more tender lots.
In the three completed tenders of the year a total of 19 diamonds sold for in excess of $1 million USD, including 7 for more than $ 2 million USD and one for over $ 8 million USD. Lucara Diamond Corporation President and Chief Executive Officer, Eira Thomas said revenue received was in line with expectations and in line with the Company, meeting the yearly guidance of $ 170 to $ 200 million USD in revenue.
Thomas said her company continues trading on positive trajectories with continued strong performance of Karowe mine as well as the consistent recovery of large, high quality diamonds that contribute more than 70% of Lucara’s total revenues. “Attendance at our sales remains high, a testament to our well established client base and Karowe’s production profile, which continues to be well regarded and sought after in the marketplace,” she observed.
CLARA – THE DISTRUPTOR
The Vencuvour , Canada based Executive added that Lucara’s digital diamond trading and sales platform Clara continues to disrupt the gem sales space “Our performance is further evidenced by our growth with the client base for Clara which has grown from 4 to over 20 customers since the beginning of the year. Ramp up continues on plan, with transactions now occurring bi-weekly.” She said.
This week US based global business media house Bloomberg reported that Lucara’s Clara Diamond Solution is set to transform the diamond supply value chain. Bloomberg says modern technology has been making serious inroads into the diamonds traditional industry. “Advances in software, scanning and now block chain are disrupting long-established business practices” noted the US based media outfit.
Clara Diamond Solutions is a secure, web-based, digital sales platform. It uses proprietary analytics, combined with cloud and block chain technologies to completely modernize the diamond supply chain. Eira Thomas says feedback on the Clara Diamond Solutions platform has been overwhelmingly positive. “Customers return after their first experience, having saved considerable time and money,” shared Thomas.
Thomas explained that Clara’s approach transforms current sales practices, driving efficiencies and unlocking value for producers and manufacturers alike. The platform operates under an exclusive collaboration agreement with Sarine Technologies, a well-established service provider of diamond scanning and planning technologies used by the diamond manufacturing companies globally.
She elaborated that for the producers, Clara helps reach a broader customer base and allows for continuous sales, which helps smooth out cash flows. “By sidestepping purchasing in batches, manufacturers don’t have to finance unwanted inventory and resell unwanted diamonds. All of this means more certainty, transparency and profits for producers and manufacturers,” she said. Thomas says Clara will continue to help maximize the value Lucara receives for Karowe diamonds, as demand is increased, and will because it is a completely scalable offering ,be opened up to other producers to try as well.
ANOTHER TOP GEM RECOVERY
On Wednesday Lucara announced yet another high value recovery from Karowe, this time around the underground terrains of the magnificent Karowe open pit birthed a 123 carat gem quality top white Type II diamond. The high value precious stone was recovered from direct milling ore sourced from the EM/PK(S) unit of the South Lobe. The EM/PK(S) has also delivered several other high value diamonds including the 1,109 carat Lesedi La Rona, the 813 carat Constellation and the recently recovered 1,758 carat Sewelô.
The Botswana Stock Exchange listed diamond outfit says the EM/PK is an important economic driver for the underground feasibility study which is currently underway and scheduled for completion in Q4 later this year. A 375 carat gem quality diamond was also recently recovered at Karowe from the processing of historic DMS recovery tailings, generated prior to the incorporation of Lucara’s XRT diamond recovery circuits.
Karowe continues to have strong production performance year to date, with recovery from direct milling ore of 22 individual, +100 carat diamonds, including 6 greater than 200 carats. “Reprocessing of historic DMS recovery tailings (pre-XRT circuit) is ongoing. Processing of these tailings does not displace direct feed ore, but rather supplements overall production.”
Karowe is the only mine in recorded history to have recovered two diamonds larger than 1,000 carats. The Sewelô was an unbroken 1,758 carat near gem-quality diamond recovered in April this year. It was the largest diamond from the Karowe mine so far, and one of the largest diamonds in the world, while being the largest ever from Botswana. Since 2012, Lucara has recovered 14 diamonds above 300 carats, with two surpassing the 1,000-carat threshold. To date, the company has sold 10 diamonds above USD$10 million each.
Year to date, from all processing, the mine has produced 29 diamonds weighing more than 100 carats, including 8 diamonds gauging over 200 carats. Karowe has open pit reserves allowing for a mine life that will reach 2026. However, robust output since mining began in 2012 has management excited about organic growth. Studies are underway to assess the feasibility of extending Karowe’s mine life for at least another ten years to 2036 by expanding the mine underground.
The Company’s $14.9 million program for 2019 consists of ongoing drilling, sampling and geotechnical studies. Included in this effort is an updated resource statement, which indicates higher grades and potentially coarser diamond size-frequency distribution at depth. Moreover, test pumping, modelling and outfitting of new de-watering wells have helped significantly de-risk the underground mining potential. Thomas says the Feasibility Study results for an underground mine are expected in Q4 this year, and a construction decision should be made by H1 next year, “so investors can anticipate continued updates regarding mine potential,” Thomas concluded.
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.
The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.
In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.
Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.
China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.
Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.
On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.
According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.