Lucara Diamonds, a Toronto-listed company, has brought some much-needed positive news to the diamond industry after a period of declining sales and prices, which has forced production cutbacks by De Beers and sales delays by Petra Diamonds.
Lucara, which operates the Karowe mine in northeastern Botswana, announced adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $18.8 million for the second quarter of 2024, up from $16.5 million in the same period in 2023.
The company achieved an operating margin of 67%, an improvement from 59% in the previous year. Additionally, Lucara reduced its operating costs per ton processed by 6% and invested $11.2 million into its Karowe underground project.
Lucara’s key advantage in the market is its production of large, high-quality diamonds, which continue to command strong prices, according to the company.
During the quarter, Lucara recovered 92,419 carats of diamonds, including 206 “specials,” which are rough diamonds larger than 10.8 carats. Among these were three particularly large stones, weighing 491, 225.6, and 109 carats, respectively.
These strong results come as a relief for Lucara, which has faced financial difficulties recently, leading to the resignation of former CEO Eira Thomas in August last year. The company struggled to finance the delayed underground expansion at the Karowe mine.
William Lamb, who took over as CEO in January, announced that the company’s debt had been restructured and confirmed that the $683 million underground expansion project would be completed.
Lamb stated, “Lucara’s performance this quarter reaffirms our position as a leader in the diamond industry. Our unique production profile, highlighted by these exceptional stones, along with our innovative sales strategies, enables us to navigate current market conditions effectively.”
Lamb also noted that underground production at Karowe is expected to begin in the first half of 2028, which will extend the life of the mine until 2040.
