Lucapa Revenue Drops in First Quarter

RAPAPORT... Sales of rough from Lucapa Diamond Company's Lulo mine fell in the first quarter as the average price dropped amid a weak market.Revenue slid 36% year on year to $7.8 million, the company said Monday. Although sales volume surged to 2,818 carats compared with 451 carats the previous year, the average price plummeted 90% to $2,758 per carat. That was partly due to an unfavorable comparison with the same period in the previous year, when the miner sold six large stones it had been saving for auction at its first Angolan tender. Production for the three months ending March 31 grew 45% to 4,891 carats.During the period, Lucapa recovered 136 stones weighing more than 4.8 carats from Lulo, a 48% increase over the previous year. Those included 42 special-size stones - above 10.8 carats - the largest of which was a high-quality, 117-carat white diamond.Lucapa's Mothae mine in Lesotho produced 6,853 carats in the first quarter, 1% lower than in 2019. Of these, 137 stones weighed more than 4.8 carats, among them a 64-carat, D-color stone. The company also recovered a 0.3-carat, type IIb blue diamond during the period - the first of that color to be unearthed at the deposit. Revenue slid 44% year on year to $2.1 million, as a 52% drop in the average price outweighed a 17% jump in sales volume.The miner put the site on care and maintenance to stem the spread of COVID-19, and plans to recommence operations when "health protocols permit and the global markets recover," Lucapa noted.The company is in discussions with the Angolan government and Endiama, Angola's state-run diamond mining company, to increase its stake in Lulo to a majority holding, it noted. Lucapa believes this will enable it to secure additional funding to expedite its ongoing kimberlite exploration program, which aims to identify the primary source of its alluvial diamonds at Lulo.At the end of the quarter, Lucapa had 4,780 carats in its Mothae inventory and 3,037 carats at Lulo, it added.Image: The 117-carat stone recovered from Lulo. (Lucapa Diamond Company)