Lucara Diamond Corp. has announced results for the three months ended March 31, 2018 in which it achieved revenue of $25.4 million (Q1, 2017: $26.1 million) or $401 per carat (Q1 2017: $405 per carat).

Karowe delivered solid performance in the first quarter, underpinned by production from the South Lobe which yielded 218 specials (diamonds >10.8 carats in size), the third best quarterly tally ever, and included eight diamonds greater than 100 carats in size,” comments CEO, Eira Thomas.

“Large stone recoveries continued into April and included a 472 carat top light brown and a 327 carat white gem.

“The strong sales result achieved from our first Regular Stone Tender of the year is consistent with the improving sentiment of the broader diamond market, and positions Lucara well for its June sale, which will include both a Regular Stone Tender and an Exceptional Stone Tender.”

Karowe diamond sales

Diamonds are heterogeneous by nature, with thousands of different price points depending on weight, colour, shape, and quality.

Diamond production from Karowe is characterised by a coarse diamond size frequency distribution and is positively impacted by the regular recovery of diamonds in excess of 10.8 carats in size, referred to as “specials.

Karowe production is further distinguished by the consistent recovery of high value, gem quality specials.

Based on a production profile of 270,000 to 290,000 carats per annum, primarily sourced from the South Lobe, Lucara expects to consistently achieve average diamond values of between US$625 to US$680 per carat.

This average diamond value excludes contributions from the less frequent and less predictable recovery of very large, high quality gem diamonds like the historic 1109 carat Lesedi La Rona and the 813 carat Constellation.

Regular Stone Tenders versus Exceptional Stone Tenders

Historically, Lucara has sold diamonds through both regular stone tenders (RST’s) and exceptional stone tenders (EST’s).

Diamonds that qualify for EST’s are rare, selected on a range of criteria including weight, quality, color, and, often achieve sales prices in excess of USD$ 1 million per diamond.

On average, Lucara has held between 4 and 5 RST’s and 1 to 2 EST’s per annum.

Lucara continues to adjust its sales strategy to maximize client participation and achieve best possible revenue.

As a result, Lucara has decided to conduct an Exceptional Stone Tender (EST) during the regular tender scheduled for June 2018 and thereafter, will move to a blended tender process, whereby a greater number of exceptional stones will be sold as part of RST’s.

This will decrease the inventory time for large, high value diamonds and will generate a smoother, more predictable revenue profile, that better supports price guidance on a per sale basis.

As part of this new approach, Lucara will retain the optionality of tendering truly unique and high value diamonds through special tenders, outside of the scheduled RST’s.