Lucara Diamond Corp: Q1 2022 Results

6th May 2022

LUCARA’S Q1 2022 REVENUE OF $68.2 MILLION REFLECTIVE OF A STRONG START TO 2022

Lucara Diamond Corp. (“Lucara” or the “Company”) today reports its results for the quarter ended March 31, 2022.

Q1 2022 HIGHLIGHTS:

  • Revenue in Q1 2022 increased by 28% to $68.2 million from $53.1 million in Q1 2021 a reflection of strong rough and polished diamond market fundamentals into the first quarter.
  • The combination of a strong diamond market, combined with the sale of several higher value rough diamonds in Q1 2022 generated an average price per carat (excluding top-up payments) of $690 for Karowe diamonds sold during the quarter (Q1 2021: $480 per carat).
  • A total of 186 Specials (single diamonds in excess of 10.8 carats) were recovered, representing 6.9% weight percent Specials (Q1 2021: 6.8%).
  • Sales volumes transacted on Clara during Q1 2022 totalled $7.0 million, a 17% increase from the $6.0 million in sales volume transacted in Q1 2021. A third-party producer will commence a series of trial sales beginning in Q2 of 2022.
  • A total project investment of $31.1 million into the Karowe UGP during Q1 2022 focused on shaft pre-sinking activities and construction of a new 29km 132kV transmission line.

Eira Thomas, President & CEO commented:

“Lucara begins the year on a positive trajectory, having fully financed and significantly de-risked our growth plans for the underground expansion in 2021 and delivered another strong quarter of operating and financial results in Q1, reflecting solid performance at the mine combined with continued buoyancy in diamond prices. Preparation for main shaft sinking is well underway and anticipated to begin in Q2. Our multi-channel approach to sales through tenders, Clara and HB continues to mature, creating alignment along the value chain, delivering efficiencies and higher margins. Despite current geo-political challenges, Lucara remains optimistic about diamond prices as natural rough diamond supply constraints continue to manifest globally.”

REVIEW FOR THE QUARTER ENDED MARCH 31, 2022

  • Operational highlights from the Karowe Mine for the three months ended March 31, 2022 included:
    • Mined 0.8 million tonnes (Q1 2021: 1.0) and 0.5 million (Q1 2021: 0.8) of ore and waste, respectively.
    • Processed 0.7 million tonnes of ore (Q1 2021: 0.7) and recovered 83,917 carats (Q1 2021: 80,014 carats), achieving a recovered grade of 12.6 carats per hundred tonnes (Q1 2021: 11.9 cpht).
    • A total of 10 diamonds greater than 100 carats were recovered during the quarter.
    • Total Recordable Injury Frequency Rate (“TRIFR”) of 0.23 in Q1 2022 reflects one medical treatment case reported (Q1 2021: zero).
  • Financial highlights for the three months ended March 31, 2022 included:
    • Revenues from the sale of 80,295 carats recovered from the Karowe Mine were $67.2 million (Q1 2021: $53.0 million from the sale of 91,734 carats from Karowe). The sales agreement with HB Trading BV (“HB”) accounted for 66% (Q1 2021: 72%) of total revenues recognized in the quarter.
    • Operating cash costs of $29.30 per tonne processed(1) (Q1 2021: $29.24 per tonne processed) remained consistent with the comparative period. Q1 2022 costs are inclusive of the impact of higher power, labour and insurance costs, partially offset by a comparatively stronger U.S. Dollar.
    • Adjusted EBITDA(1) of $36.0 million increased by 62% from $22.2 million for the same period in 2021, attributed primarily to higher revenues.
    • Net income for the quarter increased to $19.0 million ($0.04 basic earnings per share) from $3.4 million ($0.01 basic earnings per share) in Q1 2021.

(1) Operating cash cost per tonne processed and adjusted EBITDA are non-IFRS measures (See “Use of Non-IFRS Financial Performance Measures”).

  • Cash position and liquidity:
    • As at March 31, 2022, the Company had cash and cash equivalents of $39.1 million.
    • The Company drew an additional $20.0 million from the $170.0 million project loan facility in the quarter for a total drawn amount of $45.0 million.
    • Strong cash flow from operations allowed for a reduction to the outstanding balance on the working capital facility, from $23.0 to $12.0 million as at March 31, 2022.

News in full

In the TV clip below, Lucara’s CEO Eira Thomas explains the business, including the deal with Louis Vuitton and tells us more about Clara, Lucara’s wholly owned digital sales platform