After taking a dip due to the COVID-19 pandemic, diamond demand and prices have since recovered and are back to pre-pandemic levels. This is good news for Lucapa Diamond Company who recently announced a 35% increase in diamond resource carats at its Lulo mine in Angola.
The updated resource was independently estimated and reconciled on a depletion and addition basis to 31 December 2020 by external consultants, Z Star Mineral Resource Consultants.
AUTHOR: Gerard Peter
The updated resource was estimated after taking into account mining depletion to 31 December 2020 by SML, during which time ~23,600 carats of diamonds were recovered from ~271,700 bulk cubic metres of gravel; the delineation of new or additional resources and improved knowledge of existing resource areas through an extensive ~4,800 hole auger drilling and 770 hole pitting programme; and sales of diamonds produced during 2020.
Setting a new record
Even after accounting for mining depletion of ~23,600 carats during 2020 and a reduction in grade to 6.86 carats per 100 cubic metres primarily as a result of adjusting the mining dilution factor, the in-situ resource carats increased by 35% to 135,900 carats. As a result of delineating additional resources, the total diluted volume of gravel available for mining in the updated resource increased to 2.0Mm3. This equates to a minimum of five years throughput at current rates.
The Covid-19 pandemic’s effect on achieved diamond prices during 2020 resulted in the modelled value reducing to US$1,440/carat. To date, 112,000 carats of diamonds have been recovered and sold at Lulo for a total US$200 million at an average price of US$1,790/carat.
According to Lucapa MD Stephen Wetherall, the increases in the Lulo diamond resource over the last few years is a direct result of disciplined investment in the alluvial exploration and delineation programmes. “The 35% increase in carats to ~136,000 carats is a new record for carats in the Lulo diamond resource notwithstanding six years of mining depletion. This year’s update too highlights the valuable contribution of the newly delineated leziria areas which have provided a stream of top-quality recoveries,” he added.
With a good resource, Lulo is well-positioned to take advantage of good market conditions for the foreseeable future. Certainly, the mine has a bright future ahead of it.