Diamond miner Lucara Diamond Corp. has increased its 2018 forecast for ore mined from between 2.5 and 2.8 Mt to 2.9 and 3.1 Mt. This will consequently increase its diamond recovery from the original maximum of 290 000 carats to 350 000 carats.
This increase is due to better plant performance resulting in a higher recovery of smaller diamonds, which do not contribute materially to the company’s revenue. Despite the increase in carats recovered, revenue is expected to be in the range of $180 – $190 million (2018 guidance: $170 – $200 million).
During the quarter, Lucara worked cooperatively with Aveng Moolmans and Trollope Mining Services Pty to implement a transition of all mining services to Trollope.
August was the first month in which Trollope was responsible for all waste and ore mining. Performance improved considerably through the third quarter and has continued. Given the improved performance realised during this period, waste mining is still expected to be within guidance (13.0 to 16.0 Mt) for the year.
A change in the mine plan following the mineral resource update mid-year has resulted in a larger volume of ore mined than originally anticipated. The additional ore results from waste mining in the north lobe. This ore is lower-grade and has been stockpiled for processing at a later date.
“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,” says Eira Thomas, President and CEO of Lucara.
The company achieved revenues of $45.7 million or $450 per carat for its sales in the third quarter, yielding an operating margin of 59% during the period.
The third quarter of 2018 saw Lucara host its first blended tender process in which both regular and exceptional diamonds, recovered in the period May-August, were sold achieving an average price per carat of $467 from the sale of 89 461 carats (Q3, 2017: 64 289 carats), a 39% increase in the number of carats sold as compared to the same quarter last year.
Overall lower revenues reflect natural variability in the number and quality of exceptional diamonds recovered in any quarter.
A budget of up to $3.0 million was approved for the completion of a pre-feasibility level study (PFS) of the Karowe AK06 underground development. In support of this study, geotechnical and hydrogeological drilling under a budget of $26 million was initiated and as of 30 September 2018, a total of $15.6 million had been incurred.
In addition, the company completed and reported an updated mineral resource estimate in June, re-classifying inferred resources within the AK06 kimberlite from 600 to 400 m (above sea level) to indicated resources.
It was subsequently determined that the updated 2018 resource in conjunction with the currently budgeted work programmes are sufficiently detailed to support conversion of the PFS to a feasibility study (FS), which is now underway and expected to complete in H2, 2019.