Lucara Tender Beats Expectations

RAPAPORT... Lucara Diamond Corp. achieved higher sales than itexpected at its final tender of the year as market stabilization drove anincrease in rough prices.The owner of the Karowe mine in Botswana brought in $52.9million, 16% above its prediction, capping off a year of revenue growth, itsaid in a statement Wednesday."Though it is too early to call a trend, prices achievedin our final sale of the year reflect a stronger, more stabilized marketenvironment and continued strong demand for Karowe diamonds," said Lucara CEOEira Thomas.Last Thursday's sale generated an average price of $548per carat, with pricing improving in all size categories, the company added. Asa result, full-year sales rose 9% to $192.5 million, beating Lucara's revenue forecastof $170 million to $180 million. However, the average price of $468 per carat for2019 was 7% lower than the $502 per carat the company reported for 2018.Lucara benefited from strong demand for rough on itsdigital supply platform, Clara, with its customer base increasing during theyear to 27 clients from four. Theprogram, which carried out 16 sales throughout 2019, is ready to take on goodsfrom third parties, and Lucara expects to begin trials with "at least two"other providers early next year."Demand in recent[Clara] sales has now outstripped available supply," the company commented. Thetechnology, which matches rough availability with polished demand, "isachieving strong prices for Karowe diamonds and generating attractive marginsfor its customers, confirming that significant value can be unlocked by sellingrough diamonds in a more efficient way."The miner considers itself well positioned for anincrease in diamond prices in the next year or two as rough supply beginsto run out at ageing mines. This gives reason to be optimistic for operationsat Karowe and for Lucara's plans to expand into underground mining, which wouldextend the site's lifespan through to 2040, Thomas noted.Image: A 240-carat rough Lucara unearthed in January. (Lucara Diamond Corp.)