Lucara Completes First Digital Diamond Sale on New Platform

Gem producer Lucara Diamond (TSX:LUC) has completed its inaugural online diamond sale using its wholly owned digital sales platform, Clara Diamond Solutions.

The sale, which launched on November 30, 2018, was attended by seven manufacturers, five of which purchased stones that were matched and delivered on December 16, 2018.

For its efforts Lucara brought in US$660,865, which is 8 percent over Lucara’s market price, and 15 percent greater than the company’s reserve price for the gems.

CEO Eira Thomas said that the completion of the online sale was a “momentous milestone for Clara.”

“November 30, Clara successfully initiated its inaugural diamond sale with positive results, confirming that the platform is commercially viable,” stated Thomas in the Tuesday (January 8) announcement.

“Though we are delighted with the prices achieved for the rough diamonds sold in this first sale, Clara’s longer-term value will be realized through its’ scalability, increasing the volume of rough diamonds transacted by adding production from other global diamond producers.”

The digital sales platform combines analytics with advanced cloud and blockchain technologies to list and sell rough diamonds individually according to polished characteristics and demand.

Using software developed by Sarine Technologies, a digital fingerprint of each rough diamond is created and uploaded to the Clara platform with a corresponding asking price.

On the other end of the digital connection, diamond buyers access the platform and upload their specific polished diamond requirements, such as size, cut, color and quality, as well as their desired purchase price, essentially creating an “order” within the Clara system.

The platform then uses its integrated technology to match rough diamonds from the database with the requirements put forth in the order.

While the initial sale was conducted in partnership with a select group of large vertically integrated jewelry houses and global diamond manufacturers, the company plans to invite more polished gem manufacturers and jewelry houses to subsequent sales.

“Onboarding of additional manufacturers is continuing and Lucara is in active discussion with a number of leading diamond producers who are also interested in trialing the platform in 2019,” added Thomas.

“We want to thank all of our partners for their enthusiasm and commitment to the trial, and for embracing the opportunity to innovate and modernize the diamond sales process to increase consumer confidence and unlock value for all participants in the value chain.”

Lucara also released its 2019 operating outlook this week, which forecasts a favorable year at the company’s Karowe diamond mine in Botswana, with a revenue forecast of US$170 to US$200 million through the sale of some 300,000 to 320,000 carats of diamonds.

A feasibility study into expanding Karowe’s life from 2026 to 2036 is also planned for this calendar year.

“Having stabilized and significantly improved our 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,” added Thomas in a press release.

“Our focus at Karowe in 2019 will be on driving operational efficiencies, increased productivity and cost control, and maximizing cash flow.”

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.