Lucara Recovers 197 Special Diamonds in Q3

Gem Investing

During the quarter the Canadian diamond company discovered 197 special diamonds, which are stones weighing 10.8 carats or more.

Lucara Diamond (TSX:LUC) released its Q3 2018 results. During the quarter the Canadian diamond company discovered 197 special diamonds, which are stones weighing 10.8 carats or more. The precious gem miner also unearthed 10 gems weighing more than 100 carats.

As quoted from the press release:

HIGHLIGHTS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2018
Karowe’s overall performance with respect to ore and waste mined, ore processed and carats recovered was within forecast for the third quarter ended September 30, 2018:
Ore and waste mined was 1.2 million tonnes and 3.9 million tonnes respectively
Ore processed totaled 0.73 million tonnes with a record 0.26 million tonnes processed in the month of September 2018
197 specials (single diamonds larger than 10.8 carats) were recovered during the third quarter, representing 4.7 percent weight percentage of total recovered carats, in line with expectations; 10 diamonds were recovered greater than 100 carats in weight
Commercialization efforts at Clara are tracking according to budget and plan with inaugural sales expected to commence in November
Quarterly sales revenue of US$45.7 million (Q3 2017: US$77.9 million) or US$450 per carat (Q3 2017: US$1,161 per carat) recognized during the quarter. This revenue includes proceeds of US$3.9 million received in July 2018 related to the Company’s June tender. Third quarter sales from 2017 included the sale of the Lesedi La Rona (“LLR”) for US$53 million ($47,777 per carat), adjusting for the sale of the LLR, the Q3 2017 average sales price was US$389 per carat.
The operating cash cost for the nine months ended September 30, 2018 was US$41.20 per tonne processed (2017: US$32.40per tonne processed) compared to the full year forecast cash cost of US$38–$42 per tonne processed. Year to date operating cash cost per tonne processed was impacted by higher than expected tonnes mined and processed, and an increase in the cost per tonne mined due to the mining contractor transition which commenced mid-year. Forecast costs for the 2018 fiscal year are still expected to be within guidance.
Q3 2018 EBITDA of US$18.2 million (Q3 2017: US$49.8 million) reflects lower revenues attributable to a smaller volume and lower average price of exceptional stones sold, as compared to Q3 2017 which included the sale of the 1,109 carat LLR.
Net income for the three months ended September 30, 2018 was US$5.1 million (US$0.01 per share) as compared to net income of $32.9 million (US$0.09 per share) in the comparative quarter of 2017.
As at September 30, 2018, the Company had cash and cash equivalents of US$31.1 million. The US$50 million credit facility remains undrawn on September 30, 2018.
2018 guidance has been increased for tonnes of ore mined and carats recovered; the remainder of the Company’s guidance remains unchanged for 2018.
“Third quarter operational performance at Karowe exceeded expectations with respect to ore mined and carats produced, and reflects a seamless transition, three months ahead of schedule, to our new mining contractor, Trollope Mining Services. In parallel, we saw higher asset availability and record utilization rates for the process plant, positively impacting carat recoveries,” said Eira Thomas, president and CEO.