Lucara Diamond Corp.’s revenue fell in the first quarter due to a decrease in the quantity of large stones sold under its offtake agreement with HB Antwerp.
Sales dropped 4% year-on-year to $41.1 million, the company reported last week. Lucara sold $36.2 million worth of goods through tenders and its Clara online platform, receiving an additional $4.9 million in top-up payments from HB Antwerp.
This agreement involves the purchase of all diamonds over 10.8 carats from the Karowe mine in Botswana. This compares to $6.6 million in top-up payments during the same period last year.
In the first three months of the year, prices of smaller diamonds stabilized, showing a 4% increase compared to the previous quarter, while larger diamonds saw an 18% quarter-on-quarter price increase.
Despite these price improvements, the reduced quantity of larger rough diamonds available for sale impacted revenue.
Lucara reported a net loss of $7.9 million, a significant decline from a net profit of $1 million in the same period last year. The loss was mainly attributed to a $10.5 million debt repayment incurred in the first quarter.
The company recovered 89,145 carats in the first quarter, a slight decrease of 0.6% from the same period a year ago.
Despite these challenges, Lucara maintained its revenue projection of $220 million to $250 million for 2024, noting improved diamond recoveries and quality in April.
However, the company warned that continued variability in output and quality observed over the last two quarters could impact full-year revenue guidance.
“Work on the underground expansion project at Karowe progressed well during the quarter,” said Lucara CEO William Lamb.
“[This] positions us to access the higher-value ore from the underground portion of the ore body early in 2028.
While the diamond market remained relatively stable in the first quarter, we observed some cautious sentiment due to the broader macroeconomic climate of high inflation and interest rates impacting consumer demand in certain regions.
However, the fundamental supply-and-demand dynamic continues to favor natural diamonds over the long term as new mine supply remains constrained.”
