Gaborone: Lucara Diamond Corp., which runs the Karowe Mine in Botswana and holds multiple exploration licences in the region, reports record earnings – and dividends – for the year 2016. Revenues increased 32% to $295.5 million from $223.8 million in 2015, with its EBITDA surging 38% to $184.4 million on the back of a 40% rise in price per carat achieved: $824 per carat compared to $593 per carat a year ago.
The company sold 358,806 carats during the year. Lucara’s year-end cash position fell to $53.3 million from $134.8 million in 2015 as a result of record dividend payments of $149.7 million during the period. Q4 earnings at $66 million were up slightly over Q4 2015 ($65.2m), as Q2 dividends of $140.8 million were the game-changer for the year 2016.
Lucara’s new mine contractor, Moolman Mining Botswana (Pty) Ltd a subsidiary of Aveng Mining (“Aveng Moolmans”) commenced mobilization to the Karowe mine in February. Since December 2016, during the period of transition to Aveng Moolmans, Karowe has processed ore from stockpile resulting in lower than forecast ore and waste mined for the year.
Ore processed for the year was in excess of forecast at 2.6 million tons with diamond recoveries totaling 353,974 carats, which was in line with forecast. They report the successful implementation, on time and on budget, in Q3 of the project to increase the top size of diamonds recoverable by the existing Large Diamond Recovery. The Mega Diamond Recovery (“MDR”) and the sub middles XRT project are advancing and expected to complete on time and on budget in 2017.
William Lamb, President and Chief Executive Officer commented, “The Company achieved record sales in 2016. We demonstrated our commitment to deliver consistent and sustainable value to our shareholders as well as the strength of our cash flow generation by paying a special dividend during the year, while continuing to advance growth opportunities in Botswana. We remain focused on operating performance at the Karowe mine and are well positioned to continue to drive operating efficiencies and safe productivity in partnership with our new mining contractor.”
“Our capital projects for enhanced diamond recovery are on target to be completed in 2017, ensuring maximum diamond recoveries from the high value south lobe. We also remain excited with our work on resource expansion at the Karowe mine through our deep drilling program and our advanced exploration program in Botswana,” he added.
Karowe is forecast to process 2.2-2.5 million tons of ore, producing between 290,000 and 310,000 carats of diamonds in 2017. Revenue is forecast between $200 and $220 million. This excludes the anticipated sale of Lesedi La Rona held in inventory at December 31, 2016.