Lack of Top-Quality Diamonds Hits Lucara

RAPAPORT... Lucara Diamond Corp.'s sales and profit fell in the secondquarter amid lower-quality production from its Karowe mine and a drop in the averageprice. Revenue declined 19% year on year to $64.5 million for thethree months ending June 30, even as sales volume rose 26% to 75,329 carats,the company reported Wednesday. The average selling price slid 36% to $856 percarat. Profit slumped 39% to $19.7 million. While Lucara recovered a higher quantity of large diamonds,the revenue drop reflected the absence of top-quality stones of the type theminer sold in the same period last year. Those included a 373.72-carat shard (pictured,right) - once part of the Lesedi La Rona - that fetched $17.5 million inMay 2017. Lucara recovered 253 special-size diamonds - over 10.8carats - during the period, the highest number of specials it has recovered ina single quarter. Of those diamonds, 11 weighed over 100 carats, includingthree that exceeded 300 carats. Twelve stones sold for more than $1 millioneach. The quarterly revenue excludes $3.9 million Lucara receivedin July for diamonds it sold in June. The company also increased its resource estimate for the AK06project at the south lobe of its Karowe asset in Botswana by 54%, from anearlier range of 4.4 million to 6.8 million carats. Lucara intends to shift its focus to the south lobe, where the miner has recovered larger andhigher-value stones than those in the north or center lobes. Lucara expects to produce between 270,000 and 290,000 caratsthis year, and has forecast revenue of $170 million to $200 million, in linewith its previous outlook. Revenue for 2017 was $220.8 million, boosted by the $53million sale of the Lesedi La Rona. Image: Donald Woodrow