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Extreme losses for Lucara in Q1

After a mixed bag of events during the first quarter of 2018, including change in management, and the successful discovery of a 472 and 327 carat diamonds from the south ore lobe respectively, Lucara Diamond’s first quarter results declined when compared to the first quarter of the just ended year.

The Vancouver-based miner, which operates the Karowe mine in Botswana has reported achieved earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.4-million which when compared to the same period prior year has a made a 3.5 million loss.
Although the company has made a substantial loss in comparison, they have noted that Revenue, EBITDA and earnings per share performance were as expected. They have highlighted that they reflect the overall timing of the Company’s sales tenders, with a single tender held during the first quarter.

Net loss for the three months ended 31st March 2018 has been reported at $7.0 million reflecting a loss of $0.02 per share as compared to a loss of $1.5 million ($0.00 per share) in the comparative quarter and is attributable to lower revenues, higher depletion and amortization costs, higher administrative and other expenses as compared to the same period in 2017.

The Company’s cash balance as at March 31 2018 is reported to have been $ 43.6 million, a decrease of $ 17.5 million from the December 31, 2017 cash balance of $ 61.1 million. The company has associated the decrease mainly due to the Company’s reduction in non-cash working capital by $ 5.8 million, capital expenditures of $4.0 million primarily for the sub-middles XRT project audit facility. This is reported to have had an effect on capitalized production stripping costs which amounted to $6.8 million with the $50 million credit facility undrawn.

In the reported period, Lucara’s Karowe mine has noted that Ore and waste mined during the three months ended March 31, 2018 amounted to 0.6 million tonnes and 4.0 million tonnes respectively. Tonnage processed was within forecast at 0.6 million tonnes, with a total of 75,698 carats recovered. Ore processed was predominantly from the South lobe. During Q1, a total of 218 specials (single diamonds larger than 10.8 carats) were recovered including four diamonds greater than 100 carats in weight. Recovered specials equated to 6.8% weight percentage of total recovered carats during the first quarter.

The Chief Executive Officer (CEO) Eira Thomas noted that Karowe delivered solid performance in the first quarter; she said this was underpinned by production from the South Lobe which yielded 218 specials diamonds greater than 10.8 carats in size. She noted that this was the third best quarterly tally ever, and included eight diamonds greater than 100 carats in size. The CEO further highlighted that large stone recoveries continued into April and included a 472 carat top light brown and a 327 carat white gem. Eira cited that the strong sales result achieved from their first Regular Stone Tender of the year is consistent with the improving sentiment of the broader diamond market, and positions Lucara well for its June sale, which will include both a Regular Stone Tender and an Exceptional Stone Tender.”

Lucara Diamonds, which has sold diamonds through both regular stone, tenders (RST’s) and exceptional stone tenders (EST’s) notes that they will continue using the method. The Diamonds that qualify for EST’s are rare, selected on a range of criteria including weight, quality, color, and, often achieve sales prices in excess of USD$ 1 million per diamond. On average, Lucara has held between 4 and 5 RST’s and 1 to 2 EST’s per annum. As they continue to Lucara continues to adjust its sales strategy to maximize client participation and achieve best possible revenue.

As a result, Lucara has decided to conduct an Exceptional Stone Tender (EST) during the regular tender scheduled for June 2018 and thereafter, will move to a blended tender process, whereby a greater number of exceptional stones will be sold as part of RST’s. This they note will decrease the inventory time for large, high value diamonds and will generate a smoother, more predictable revenue profile that better supports price guidance on a per sale basis. As part of this new approach, Lucara will retain the optionality of tendering truly unique and high value diamonds through special tenders, outside of the scheduled RST’s.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
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.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

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.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

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.

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