ASX-listed Lucapa Diamond Company has sold of its run-of-mine diamonds from the Mothae kimberlite mine in Lesotho into a cutting and polishing partnership with a high-end diamantaire.
Due to lockdowns and various restrictions being imposed by countries across the globe in order to prevent the spread of COVID-19, Mothae was unable to market its diamonds through its regular tender channel in Belgium.
Pleasingly and as a result of demand still existing for Mothae’s quality of product, the 3 963 carats have been sold into a cutting and polishing partnership with a high-end diamantaire for US$2 million (A$3.2 million), which equates to US$505/ct (A$809/ct).
Under the agreement, Mothae will receive the rough price upfront and following accounting for the procurement and diamond manufacturing costs, additional margins generated from the later sale of the diamonds beyond the mine gate will be shared equally between Mothae and the partner.
Lucapa MD Stephen Wetherall says that despite the current macroeconomic uncertainty brought about by COVID-19 hindering the marketing of diamonds and prices generally, it was pleasing to still see some demand for the higher-quality Mothae-type production.
“The sale of diamonds into the cutting and polishing partnership in this environment provides Mothae with a level of price protection in that Mothae should receive additional margins from the onward sale of these diamonds,” Wetherall concludes.