Lucapa Reports Strong First Quarter

RAPAPORT… Revenue at Lucapa Diamond Company soared in the first three months of the year as the miner benefited from a rebound in the rough market.

Sales from the company’s Lulo mine in Angola increased 22% year on year to $9.5 million for the quarter ending March 31, Lucapa said Monday. An 89% surge in sales volume to 5,313 carats outweighed a 35% drop in the average price to $1,796 per carat.

Meanwhile, revenue from Lucapa’s Mothae mine in Lesotho leaped to $11.5 million from $2.1 million a year earlier. Sales volume climbed 63% to 10,295 carats, and the average price jumped 330% to $1,117 per carat.

“After a testing 2020, the recovery in the diamond sector has continued its momentum, resulting in strongly supported prices across the diamond industry,” commented Lucapa managing director Stephen Wetherall. “This, together with the stellar performances at our mining operations, has resulted in record recoveries, mining volumes and diamond revenues, delivering outstanding quarterly operating profits and cash flows.”

Lucapa sold the majority of its rough into its cutting and polishing partnership with Safdico. Under the deal, the manufacturer purchases the goods at full market value, and shares the proceeds of the polished sales with the miner.

Lulo production slipped 5% to 4,655 carats. During the first three months of the year, Lucapa recovered 136 stones weighing more than 4.8 carats from Lulo, on a par with the same period in 2020. Those included 65 special-size stones — above 10.8 carats — five of which weighed more than 100 carats. The company also unearthed three large pink diamonds weighing 54, 40 and 27 carats.

Output at Mothae fell 23% to 5,264 carats due to a 14-day lockdown to stem the spread of Covid-19 and a planned two-week shutdown to expand the deposit. The miner recovered 96 stones weighing more than 4.8 carats from Mothae, down 30% from the previous year. Those included 19 special-size stones, the largest of which was a high-quality, 213-carat, D-color, type IIa diamond, the biggest Mothae has yielded.

Lucapa has finished its expansion of Mothae, and will conclude the ramp-up to the new capacity in the second quarter. The miner expects to see a higher recovery rate of high-quality, 100-carat-plus diamonds from the new area, it said.

Image: Rough diamonds from the Mothae mine. (Lucapa Diamond Company)