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Lucara recovers 127 carat white gem diamond

Canadian based top gem producer, Lucara Diamond Corporation last week announced another watershed recovery from its Botswana flagship mine, Karowe located in the lucrative Boteti diamond fields.  In a statement released by the Botswana Stock Exchange (BSE) listed corporation, which wholly owns and operate Karowe announced the recovery of a 127 carat, top white gem diamond.

Since mining began at Karowe in 2012, a total of 129 diamonds in excess of 100 carats have been recovered, 33 in 2018 alone. That tally includes 12 diamonds larger than 300 carats in size, of which five were recovered in 2018.  In addition, Lucara has sold 180 diamonds in excess of $1 million (P10.5 million) each and ten diamonds have sold for in excess of $10 million (P105 million) each.

 
When commenting on the recovery Eira Thomas, Lucara President and Chief Executive Officer said her company’s latest unearthing of this high value, top white 127 carat diamond attests to the remarkable nature of the Karowe ore body, which has consistently dispatched large, high value diamonds throughout its history. “2018 was an incredible year for our mining operation, having recovered a record number of Special diamonds of 10.8 carats in size,” said Thomas.

Lucara chief further shared that in 2019, Korowe’s mining will be largely focused on the high value south lobe, including contributions from the newly refined EMPKS unit which is now understood to be the source of both the historic 1109 carat Lesedi la Rona and the 813 carat Constellation, which sold for a record US$63.1 million (P660 million).  The Karowe Diamond mine currently boasts of its open pit reserves of 2.6 million carats extending out to 2026 and is in the process of completing a feasibility study that could expand mining underground to 2036 and beyond.

Lucara reports that another budget of $14.8 million (P155 million) has been approved to complete a feasibility study that was initiated last year, evaluating the potential for an underground mining operation at the mine.  “Work undertaken in 2018 under a budget of approximately $29 million (P304 million) has significantly de-risked the project and in 2019, efforts will focus on follow up geotechnical and hydrogeological drilling and related studies,” shared Eira Thomas in statements released last week Friday.

Lucara hinted this possibility in their Quarter 3 results last year when they received promising feedback from the underground feasibility study. According to the Vancouver headquartered Diamond Corporation, an updated mineral resource was announced for the AK06 kimberlite during 2018 Q2. The updated Mineral Resource Estimate was completed by Mineral Services Canada Inc.

 The estimate is based on historical evaluation data combined with new sampling results of microdiamond, bulk density and petrography from recent deep core drilling and from historical drill cores.  Lucara further explains that new delineation drill coverage and review of historical drill cores supported an update of the internal geological model.

Production data   which includes a controlled production run from the Eastern magmatic-pyroclastic kimberlite and recent sales-valuation results have been incorporated into the grade and value estimates, which have been made based on an updated model of process plant recovery efficiency. The in situ Mineral Reserve for AK06with an effective date of May 25, 2018 is within the probable category containing 19.84 Million tonnes with a recoverable grade of 13.08 carats per hundred tonne for 2.60 Million carats with an average price per carat of $ 624/ct.

“Life of Mine and Working stockpiles contribute an additional 5.56 Million tonnes with a recoverable grade of 6.7 carats per hundred tonne with an average price of $625/ct. The recoverable grade is based on the updated Mineral Resource estimate as presented in the technical report (1.25 mm bottom cut off size – BCOS) at 70 percent of in situ carats at 1.00 mm bottom cut off size.

Last week Lucara also released their future projections going forward. In 2019, the company forecasts revenues between $170 million (1.8 billion) and $200 million (2.1 billion), consistent with the forecast for 2018. These projections include “Specials” which are diamonds that are 10.8 carats and larger but exclude the sale of any truly unique diamonds such as the 1,109 carat Lesedi la Rona and the 813 carat Constellation.

Specials are consistently recovered from the Karowe diamond mine and contribute a significant percentage of the Company’s annual revenue. Diamonds recovered are expected to be between 300,000 carats and 330,000 carats and diamonds sold are expected to be between 300,000 carats and 320,000 carats.  Thomas says having stabilized and significantly improved its mining operations at Karowe in 2018; Lucara is now focused on optimizing the base business and pursuing a suite of high potential, organic growth opportunities.

 “The completion of a feasibility study examining the potential for underground production and Life of Mine expansion at Karowe from 2026 until at least 2036, remains a top priority for 2019,” she said. Lucara Boss also added that her company will continue to systematically ramp up diamond sales through Clara, the company’s transformational, proprietary digital sales platform that successfully completed its first trial sale in December 2018.

“Our focus at Karowe in 2019 will be on driving operational efficiencies, increased productivity and cost control, and maximizing cash flow. The waste stripping bottleneck is now behind us and we expect stripping ratios to steadily improve towards the end of the calendar year, enabling improved access to high value, south lobe ore,” she said.

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Business

18th January 2021
10 Best Forex Brokers

10 Best forex brokers that accepts Botswana Traders ( 2021 )

The best handpicked forex brokers for Botswana traders revealed for 2021. Trade with confidence with any of these licenced and regulated brokers.
1.  Exness

Exness is a popular and well-regulated broker based in Cyprus and the UK which offers traders with a variety of account types, powerful trading platforms, competitive trading conditions and more.

 

PROS

CONS

1.      Globally recognized broker1.      US clients not accepted
2.      Negative balance protection offered2.      Limited tradable financial instruments
3.      MetaTrader offered
4.      Demo account and Islamic account option offered
5.      Adequate leverage and reasonable minimum deposit requirements

2.  AvaTrade

AvaTrade is a popular and multi-award-winning Market Maker and STP broker which is regulated to offer comprehensive trading solutions in several jurisdictions.

 

PROS

CONS

1.      Strict regulation1.      US clients not accepted
2.      Negative balance protection2.      Variable spread accounts not offered
3.      Optimum execution speeds
4.      Multiple trading platforms offered
5.      Social trading supported, hedging and scalping allowed

3.  XM

XM is a popular and reputable broker which has been in operation since 2009. XM is strictly regulated by several regulatory entities and offers traders from around the world with access to global financial markets.

 

PROS

CONS

1.      Strict regulation1.      US clients not accepted
2.      Negative balance protection2.      Fixed spread accounts not offered
3.      Competitive trading conditions
4.      Variety of accounts offered
5.      High leverage ratio of 1:888

4.  eToro

eToro is a reputable and popular Market Maker broker in addition to being the leading social trading platform in the industry. eToro caters for various traders and investors from 140 countries, offering comprehensive trading solutions to both beginners and experts.

 

PROS

CONS

1.      Strictly regulated1.      US clients not accepted
2.      Client fund security guaranteed2.      Limited leverage for retail traders
3.      Commission-free trading3.      Fixed spreads not offered
4.      Large online community4.      MetaTrader not offered
5.      Demo account and Islamic account option provided

5.  IC Markets

IC Markets is an ECN broker based in Australia and Seychelles with regulation and authorization through ASIC. Established in 2007, IC Markets is one of the largest true ECN brokers in the world that offers traders access to global financial markets.

 

PROS

CONS

1.      Well-regulated1.      US clients not accepted
2.      True ECN broker2.      Fixed spread accounts not offered
3.      Low trading and non-trading fees
4.      Tight and competitive spreads
5.      Hedging and scalping allowed, social trading supported

6.  FBS

Established in 2009, FBS is a strictly regulated and reputable STP and ECN broker which has around 16 million registered traders from 190 countries worldwide.

 

FBS offers traders with more than 75 financial instruments which can be traded through powerful trading platforms, competitive trading conditions, a variety of account types, and more.

PROS

CONS

1.      Ultra-low deposit requirement1.      US, UK, Japan, Israel and several other countries not allowed
2.      Social trading supported2.      High spreads and commissions on some accounts
3.      Multiple account types offered3.      Limited trading tools
4.      MetaTrader offered
5.      24/7 dedicated customer support

7.  FxPro

FxPro is a UK-based NDD broker which is regulated by FCA, CySEC, FSCA, and SCB in facilitating the trade of more than 260 financial instruments spread across six asset classes.

PROS

CONS

1.      Multi-regulated1.      US, Canada, Iraq and others not accepted
2.      Multiple trading platforms offered2.      Social trading not supported
3.      Premium trader tools3.      Not the tightest spreads
4.      NDD Execution4.      Not the lowest commissions
5.      Expert analysis and VPS offered5.      Managed accounts not offered

8.  Alpari

Alpari is a well-regulated STP and ECN broker with nearly two decades worth experience in offering comprehensive trading solutions. Alpari boasts with 2 million registered traders from more than 150 countries worldwide.

PROS

CONS

1.      Well-regulated1.      US, Japan, Russia, and several other countries not accepted
2.      MetaTrader offered2.      Limited financial instruments
3.      PAMM accounts offered3.      No fixed spreads
4.      Multilingual customer support

 

9.  FXTM

FXTM is a UK, Cyprus, South Africa, and Mauritius-based broker which offers traders with more than 250 financial instruments to trade.

FXTM caters for both retail and professional clients and has tailormade solutions despite the trading needs and objectives of traders.

PROS

CONS

1.      Strict regulation1.      US clients not allowed
2.      Variety of financial instruments2.      Restricted leverage for EU traders
3.      Multiple account types
4.      Commission-free trading offered
5.      Low minimum deposit

 

10.        Olymp Trade

Olymp Trade is based in St. Vincent and the Grenadines and offers traders with a wide range of tradable financial instruments.

Olymp Trade, as opposed to conventional brokers, offers traders with fixed time trades which can be done through a powerful proprietary trading platform.

PROS

CONS

1.      Low minimum deposit1.      High commission fees
2.      Training resources offered2.      Social trading not offered
3.      Controlled risks and rewards3.      Not regulated
4.      Market news and analysis4.      No support for automated trading
5.      24/7 dedicated customer support5.      MetaTrader not offered
6.

 

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Business

Diamond industry crises not over yet – De Beers Chief

13th January 2021
De Beers Group Chief Executive Officer: Bruce Cleaver

Following a devastating first half of the year 2020 due to COVID-19, the global diamond industry  started gaining  positive momentum towards the end of the year as key markets entered into  thanks giving and holiday season.

However Bruce Cleaver, Chief Executive Officer of De Beers Group cautioned that the industry is not out of the woods yet, citing prevailing challenges ahead into 2021.

The first half of 2020 was characterized by some of the worst challenges in history of global diamond trade.

The midstream, where rough diamonds are traded in wholesale and bulk to cutters and polishers, was for the most part of second quarter 2020, suffocated by international travel restrictions as countries responded to the contagious Corona Virus.

This halted movement of buyers and shipment of  the rough goods , resulting  in unprecedented decline of sales, in turn  ballooning stockpiles as the upstream  operations produced with little uptake by the midstream.

The situation was exacerbated by muted demand in the downstream where jewelry industries and tail end retailers closed to further curb the spread of COVID-19.

However towards the end of third quarter getting into the last quarter of the year, demand in both midstream and downstream started to steadily pick up as countries relaxed COVID-19 restrictions.

De Beers, the world’s largest diamond producer by value started reporting significant recovery in sales in the sixth and seventh cycle, figures began to reflect an upswing in sentiment as well as increase in uptake of rough goods by midstream.

Sales for the sixth cycle amounted to $116 Million, following a sharp downturn in the previous cycles, significant jump was realized during the seventh cycle, registering $320 million, an over 175 % upswing when gauged against the proceeding cycle.

De Beers noted that diamond markets showed some continued improvement throughout August and into September as Covid-19 restrictions continued to ease in various locations.

“Manufacturers focused on meeting retail demand for polished diamonds, particularly in certain product areas, accordingly, we saw a recovery in rough diamond demand in the seventh sales cycle of the year, reflecting these retail trends, following several months of minimal manufacturing activity and disrupted demand patterns in all major markets,” said De Beers Chief Executive, Bruce Cleaver in September last year.

The diamond mining behemoth continued to register impressive sales in the eighth and ninth cycle signaling the industry could end the year on a positive note.

The momentum was indeed carried into the last cycle of the year. The value of rough diamond sales (Global Sightholder Sales and Auctions) for De Beers’ tenth sales cycle of 2020 amounted to $440 million, a significant increase from the 2019 tenth sales cycle value.

Against what seemed like a positive year end that would split into the New Year Bruce Cleaver, CEO, De Beers Group, however warned the industry not to count eggs before they hatch.

“Positive consumer demand for diamond jewellery resulting from the holiday season is supporting the continuation of retail orders for polished diamonds from the diamond industry’s midstream sector. This in turn supported steady demand for De Beers’s rough diamonds at our final sales cycle of 2020,” Cleaver had said in December.

In caution the De Beers Chief noted that “While the diamond industry ends the year on a positive note, we must recognise the risks that the ongoing Covid-19 pandemic presents to sector recovery both for the rest of this year and as we head into 2021.”

All segments of the supply chain were severely impacted by the global lockdown measures introduced in response to the Covid-19 pandemic in the first half of 2020.

After a strong US holiday season at the end of 2019, the rough diamond industry started 2020 positively as the midstream restocked and sentiment improved.

However, from February 2020, the Covid-19 outbreak began to have a significant impact on diamond jewellery retail sales and supply chain, with many jewelers suspending all polished purchases and/or delaying payments to their suppliers.

Rough diamond sales were materially affected by lockdowns and travel restrictions, delaying the shipping of rough diamonds into cutting and trading centers and preventing buyers from attending sales events.

These resulted in significant decline in total revenue for the business in the first six months of 2020. Total revenue decreased by 54% to $1.2 billion from $2.6 billion registered in the prior half year period ended 30 June 2019.

For the entire first six (6) months of the year 2020 De Beers Rough diamonds sales fell drastically to $1.0 billion from $2.3 billion in the prior H1 period ended 30 June 2019. Sales volumes decreased by 45% to 8.5 million carats compared to 15.5 million carats registered in the prior period.

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Gov’t coffers depleting to record low levels 

13th January 2021
Dr Matsheka

Next month Minister of Finance & Economic Development, Dr Thapelo Matsheka will face the nation to deliver Botswana‘s first budget speech since COVID-19 pandemic put the world on devastating economic trajectory.

The pandemic that broke out in late 2019 in China has put the entire world on unprecedented chaos ,killing over P1 million people across the globe , shattering economies and almost rendering  the year 2020 – a 12 months stretch of complete setback.

The 2021/22 budget speech will come at time when Botswana’s economy is still trying to emerge out of this.

National lockdowns and local travel restrictions have hit small medium enterprises hard, while international travel restrictions halted movement of both good and people, delivering by far some of the heaviest and worst catastrophic blows on the diamond industry and tourism sector, the likes of which this country has never seen before on its largest economic sectors.

As Minister Matsheka faces parliament next month, the reality on the ground is that Botswana’s national current cash resource, the Government Investment Account (GIA) is depleting at lightning speed.

On the other hand the COVID-19 economic mess is  prevailing,  the virus is reported to have taken a new dangerous shape of a deadly variant, spreading like fueled veld fire and causing some of the world’s super powers back to tough restrictions of lockdown.

According official figures released by Bank of Botswana, in October 2020 the GIA was running at P6 billion compared to the P18.3 billion held in the account in October 2019.

However reports indicate that the account could be currently holding just about P3 billion.  The draw down from the GIA has been by exacerbated by declining diamond revenue, the country‘s largest cash cow. The sector was experiencing significant revenue decline even before COVID-19 struck.

 

When the National Development Plan (NDP) 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at a budget deficits.

This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively, since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances.

Taking into account the COVID-19 economic mess in 2020/21 financial year, the budget deficit could add up to P20 billion after revised figures.

Drawing down from government cash balances to finance these budget deficits meant significant withdrawals from the Government Investment Account, hence the near depletion of this buffer.

Meanwhile  should Botswana’s revenue streams completely dry up to zero levels; the country would only have 11 months, before calling out for humanitarian  aids and international donors, because  foreign reserves are also on slow down.

During 2019, the foreign exchange reserves declined by 8.7 percent, from Seventy One Billion, Four Hundred Million Pula (P71.4 billion) in December 2018 to Sixty Five Billion, Three Hundred Million Pula (P65.3 billion) in December 2019.

The reserves declined further in 2020, falling by 2.3 percent to Sixty Three Billion, Seven Hundred Million Pula (P63.7 billion) in July 2020.  This was revealed by President Masisi during State of the Nation Address in November last year.

The decrease was mainly due to foreign exchange outflows associated with Government obligations and economy-wide import requirements.

However latest statistics(October 2020)  from Bank of Botswana reveal that Botswana’s foreign reserves are estimated at P58.4 billion, with  government’s share of these funds significantly low.

Government has since introduced several measures to contain costs and control expenditure with the most recent intervention being the halting of recruitment in government departments and parastatals.

Furthermore, Value Added Tax has been signaled to go up  from 12% to 14% in April this year with more hikes and service fees anticipated as government embarks on unprecedented domestic revenue mobilization.

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