Lucara Diamond Corp.’s revenue fell 21% to $41.1 million in the second quarter as the market weakened.
The decline also reflected a planned shift to lower-value goods at the lucrative Karowe deposit in Botswana, the miner reported Wednesday. Profit slid 60% to $5 million.
“Following on the record high diamond prices achieved in early 2022, a softer diamond market emerged in the latter half of 2022, which has persisted into the second quarter of 2023,” the company explained.
This weakness was “the result of global economic concerns combined with geopolitical uncertainty, including the ongoing conflict in Ukraine,” management continued.
In addition, a smaller proportion of production came from the high-value south lobe in the first quarter of this year, impacting second-quarter sales, Lucara noted. The proportion of south-lobe recoveries increased in the second quarter, boding well for sales in the second half of the year.
Sales of Karowe rough diamonds fell 9% to $33.5 million. That included $20.7 million worth of goods that Lucara sold to Belgian manufacturer HB Antwerp, with which it has an agreement to sell all stones weighing 10.8 carats or more. Revenue also included $3 million in sales of Karowe rough on the Clara digital platform and $9.8 million from tenders.
Top-up payments from the HB deal — based on the final polished value — dropped 61% to $5.1 million. Sales of third-party goods on Clara grew 9% to $2.5 million.
Overall production from Karowe rose 4.8% year on year to 90,497 carats in the second quarter. Sales volume increased 10% to 72,717 carats.
First-half revenue slid 30% to $83.9, while profit decreased 81% to $6 million.
Main image: The Karowe mine at dusk. (Lucara Diamond Corp.)