Lucapa Diamond Company reported a sharp 71% year-on-year decline in revenue for the fourth quarter of 2024, as the lower proportion of large diamonds significantly impacted the average price per carat.
Sales from the company’s Lulo mine in Angola dropped to $10 million for the quarter, with the average price per carat plunging by 80% to $1,251.
However, the company saw a 42% increase in sales volume, reaching 8,016 carats. The steep drop in average price is largely attributed to a strong comparison base from the previous year, which saw the sale of two rough diamonds over 200 carats and two more than 100 carats.
Despite the price drop, the company’s production figures showed positive growth. Lulo mine’s production increased by 5%, reaching 8,012 carats as mining focused on higher-grade ore from floodplain areas. Notably, the number of special-sized diamonds (weighing over 10.8 carats) surged by 43% to 77.
However, most of these high-value stones will be held in inventory and are expected to be sold in early 2025.
CEO Alex Kidman commented on the mine’s performance: “Production at Lulo continued to improve in the fourth quarter, following the completion of the second river diversion, leading to better grades and carat recoveries.
However, most of the larger, high-value stones recovered during the quarter will only be sold in the first quarter of 2025.” He added that the company is looking forward to further production improvements with the ongoing excavation of the next river diversion.
In addition to its operations in Angola, Lucapa is advancing exploration at its Merlin diamond project in Australia.
The company plans to restart production at Merlin in a two-phase plan starting in the first quarter of 2025. In phase one, Lucapa expects to recover 67,000 carats, generating an estimated AUD 42 million ($26.2 million) in revenue, with an average price of $415 per carat.
In phase two, the project is expected to produce an additional 247,000 carats, with revenue projections of AUD 204 million ($127.1 million) at an average price of $545 per carat.
Kidman noted, “The outstanding preliminary results for the Merlin mine highlighted two large base metals targets, leading us into an exciting period in early 2025. We look forward to announcing the final, more detailed results of the survey later this quarter.”
Lucapa’s strategic initiatives at both its Lulo and Merlin projects are setting the stage for a potentially promising year in 2025, despite the challenges faced in the current quarter.
