Lucara Posts Loss in Third Quarter

RAPAPORT... Lucara Diamond Corp. reported a loss at its Karowe mine inthe third quarter, amid increased operating expenses and a weak market forsmaller stones. The company recorded a net loss of $4 million for the periodending September 30, compared to a profit of $5.1 million during the sameperiod the year before. Operating expenses grew 9% as the miner switched to anew contractor, it noted.Revenue from the Botswana deposit slipped 1% year on year to$45.3 million, even as sales volume rose 14% to 116,200 carats. The averageprice slid 13% to $390 per carat due to an increase in the recovery ofsmaller, lower-value goods, Lucara said Monday. Production dropped 17% to104,990 carats. Lucara recovered 211 special-size diamonds - over 10.8carats - during the July-to-September period, including seven weighing morethan 100 carats. In the third quarter, the miner sold $2.4 million in roughdiamonds through five sales on its Clara platform, a rough-sales program designed to match polished demand with rough supply. Total revenue has reached $6million since the channel's launch in December 2018, with Lucara increasing its customer base for the platform by 35% to 27 buyers, it noted. Revenue for the nine months ending September 30 increased 1%to $136.5 million, while profit for the January-to-September period fell 77% to$4.1 million. The results of a new feasibility study at Karowe gave a more optimistic picture, with the company now expecting the underground expansion at the mine to extend the project's lifespan till 2040. That will add around 7.8 million carats in total, creating $5.25 billion in extra gross revenues, Lucara estimated. "Lucara is highly encouraged by the results of the Karoweunderground feasibility study, which has outlined a much larger economicopportunity than first envisaged, and represents an exciting, world-classgrowth project for our company," said CEO Eira Thomas. Lucara has raised its production outlook for the year. Itpredicts output will increase to between 400,000 and 425,000 carats, comparedwith the 375,000 to 420,000 it reported in its previous guidance. It alsoexpects to sell between 400,000 and 425,000 carats, versus its second-quarterforecast of 375,000 to 420,000. However, the miner now forecasts revenue forthe year to fall at the lower end of its $170 million to $200 million guidance,coming in between $170 million and $180 million, as it produces a higherproportion of smaller, lower-value stones, it said. Image: The Karowe mine. (Lucara Diamond Corp.)