Home » News » Business » Karowe diamonds in for a glittering 2019

Karowe diamonds in for a glittering 2019

Publishing Date : 14 January, 2019

Author : TSAONE SEGAETSHO

All thanks to Botswana’s Karowe mine diamonds, the latest forecast by BSE-listed Lucara Diamond Corp. shows a sparkling like polished diamond progression for this year with increase of sales, diamonds recovered, a swell in processed ore mining and tonnes processed and the bottleneck of waste is expected to decrease.


In the latest released forecast, diamond sales are expected to be 300,000 carats to 320,000 carats for 2019 compared to 270 000 carats to 290 000 carats in 2018. Diamonds recovered this year are expected to be seen at 300,000 carats to 330,000 carats.
While there are improvements in this year’s forecast, ore mining and tonnes processed are expected to match last year’s 2.5 million and 2.8 million tonnes. Diamond revenue for 2019 is expected to be at $170 million to $200 million (P1.7 billion to P2 billion) which also reflects last year’s prediction.


Dealing with waste stripping has always been a big bottleneck for Lucara’s Karowe mine and last year it was predicted that the mined waste would be between 13.0 to 16.0 tonnes. According to Lucara the Karowe mine did not enjoy an especially successful year in 2018 as costs overshot estimates and recoveries tended towards the lower end of the spectrum and this was owing to an increase in the amount of waste rock that had to be mined.


However on the positive, the waste decreased last year contrary to the predictions with waste mined during the three months ended in June 2018, which was the first quarter of 2018, totalled 4.4 million tonnes. The waste mined further shrunk during last year, going down to 4.4 million tonnes in the second quarter before falling to 3.9 million tonnes in the third quarter. This fall has influenced a positive forecast which predicts a fall of 6.0 million and 9.0 million tonnes, a far cry from the 2018 high waste levels.


“Our focus at Karowe in 2019 will be on driving operational efficiencies, increased productivity and cost control, and maximizing cash flow. The waste stripping bottleneck is now behind us and we expect stripping ratios to steadily improve towards the end of the calendar year, enabling improved access to high value, south lobe ore,” said Lucara President Eira Thomas when commenting on the fall in waste mining which is a positive development for production at the company’s mines.


For the 2019 outlook, the total operating cash costs per tonne processed (including (a) to (c) below): $32.00 to $37.00 (a) Cash cost per tonne mined (ore and waste) seen at $4.00 to $4.50 (b) Cash cost per tonne processed expected to be at $12.00 to $13.00 (c) Mine on-site departmental costs (security, technical services, mine planning safety and health, geology) per tonne processed to be at $5.00 to $6.00


Operating cash costs per tonne processed, excluding waste mined seen at $21.00 to $24.00. Botswana general & administrative expenses, including sales and marketing expenses, per tonne processed should be around $2.00 to $3.00 while the tax rate 22 percent to 29 percent. The average exchange rate in USD/Pula is expected to be at 10.5. It is further stated that based on 2019 revenue guidance of $170 million to $200 million and a budget of $14.8 million for the feasibility study as well as operating costs.


Furthermore, the expected tax rate is between 22 percent and 29 percent for 2019. According to Lucara a budget of $14.8 million (P148 million) has been approved to complete a feasibility study that was initiated in 2018, evaluating the potential for an underground mining operation at Karowe.  The company says work undertaken in 2018 under a budget of approximately $29 million (P290 million) has significantly de-risked the project and in 2019, efforts will focus on follow up geotechnical and hydrogeological drilling and related studies. A comprehensive update on the underground project will be provided in early Q1, 2019, according to the company.


“Having stabilized and significantly improved our mining operations at Karowe in 2018, Lucara is now focused on optimizing the base business and pursuing a suite of high potential, organic growth opportunities.The completion of a feasibility study examining the potential for underground production and Life of Mine expansion at Karowe from 2026 until at least 2036, remains a top priority for 2019. In addition, we will continue to systematically ramp up diamond sales through Clara, our transformational, proprietary digital sales platform that successfully completed its first trial sale in December 2018,” said Thomas.


Lucara is a member of the Lundin Group of Companies and is listed on the TSX Exchange, Nasdaq Stockholm and the Botswana Stock Exchange under the symbol "LUC" and operates transparently, In its Karowe mine, Lucara is known to have discovered the world’s largest diamond, the 1,109-carat Lesedi La Rona, which was later sold to Graff Diamonds for P530 million ($53 million). 

The Clara factor

Lucara’s sales are boosted by Clara Diamond Solutions, a digital sales platform that uses proprietary analytics together with cloud and blockchain technologies to modernize the existing diamond supply chain, driving efficiencies, unlocking value and ensuring diamond provenance from mine to finger.


The company says it has successfully completed its inaugural diamond sale through Clara Diamond Solutions. Clara which is 100 percent owned by Lucara was launched in December 2018 and it is said to be in plans of the mining company ramping up in diamond sales this year. According to Lucara, analysis of results is ongoing and further details about this initial sale, as well as next steps for the Clara platform will be reported in January 2019.


According to the company, Lucara will be reporting sales through Clara quarterly, along with additional guidance, once the platform has moved into continuous sales. Lucara will continue to optimize its sales strategy through a combination of Clara and its regular tender process, said the mining company.

Cartoon

Polls

Do you think the courts will help put the UDC, BMD impasse within reasonable time ahead of the 2019 General Election?

banner_14.jpg
banner_12.jpg

POPULER BRANDS