Is M&A Activity in Lucara Diamond’s Future?

CEO.ca’s Travis McPherson posited in a recent article that Lucara Diamond Corp. (TSX:LUC), whose shares are up 200 percent in the last 12 months, should use its stock to grow.

As quoted in the market news:

Lucara continues to print new highs (again today, shares are up 2.8% on over 2 million shares to $2.59 per share which is a new all-time high) and their Karowe mine will see upgrades to the processing plant be completed by the end of this year. They are spending roughly $50 million this year to upgrade the mine’s plant in order to be able to handle the large size of the diamonds they are recovering from the deposit.

The current phase in the lifecycle of Lucara is a critical one (for any mining company). They have a fully ramped-up mine that is generating free cash flow and now the company needs to maintain or grow their production. Not today or tomorrow, but eventually.

Given that nothing has transpired yet, I would only assume that Lucara’s management and Board have simply not yet found an accretive transaction.

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