Lucapa Diamond Company Unearths Stellar Performance at Lulo Project, Setting New Benchmarks in Diamond Recovery and Value

In the dynamic and often challenging world of diamond mining, a few projects consistently stand out for their ability to deliver exceptional results and uncover stones of remarkable value. Among these, the Lulo Diamond Project in Angola, significantly managed and operated by Lucapa Diamond Company Limited (with a 40% ownership stake), has carved out a reputation as a prolific source of large, high-quality diamonds. An update on its quarterly activities, specifically for the period ending September 30, 2016, painted a vivid picture of outstanding operational success, demonstrating not only a remarkable increase in production but also a strategic commitment to cutting-edge recovery technologies designed to unearth even more significant finds in the future. This period marked a pivotal moment for the project, reinforcing its status as a world-class alluvial diamond producer and highlighting Lucapa’s expertise in navigating the complexities of high-value gemstone extraction.

A Beacon of Diamond Discovery: The Lulo Diamond Project

The Lulo Diamond Project is situated in Angola, a nation renowned for its rich diamond resources. Unlike traditional kimberlite pipe mining, Lulo is an alluvial operation, meaning diamonds are recovered from riverbeds and ancient floodplains where they have been naturally concentrated over millennia. This type of deposit is often associated with the discovery of exceptionally large and high-quality stones due to the natural sorting processes of rivers, which tend to leave smaller, more fractured diamonds behind. Lucapa Diamond Company’s operational acumen at Lulo has consistently proven this potential, leading to a steady stream of significant discoveries that regularly capture headlines in the global diamond industry. The company’s hands-on approach, from exploration to processing, ensures that every aspect of the mining operation is optimized for efficiency, safety, and maximal recovery of precious stones.

Unpacking the Stellar Q3 2016 Performance

The third quarter of 2016 was nothing short of spectacular for the Lulo project. Lucapa’s detailed report underscored several key performance indicators that collectively pointed to a period of unprecedented growth and operational excellence. These metrics not only highlighted current success but also provided strong indicators for the project’s long-term viability and profitability.

Record-Breaking Production Volumes

Perhaps the most striking figure from the report was the massive surge in diamond production. For the quarter ended September 30, 2016, the mine produced an impressive 8,853 carats. This figure represents an extraordinary 154% year-on-year increase compared to the 3,479 carats recovered during the same period in the previous year. Such a substantial leap in production is a testament to improved operational efficiencies, successful exploration leading to access to richer gravels, or enhanced processing capabilities. For a mining company, increased carats recovered directly translates into greater potential for sales and revenue, underpinning the financial health and growth prospects of the operation.

Exceptional Grade and Average Stone Size

Beyond sheer volume, the quality of the diamonds recovered is paramount, and Lulo continued to excel in this regard. The mine registered a significant increase in the recovered diamond grade, reaching 13.7 carats per 100 cubic meters. This marked a healthy 73% improvement, indicating that the processing of raw material was yielding a much higher concentration of diamonds. Simultaneously, the average diamond size also saw a substantial increase, rising by 62% to an impressive 1.9 carats per stone. In the diamond industry, a higher average stone size is a critical indicator of value, as larger diamonds, especially those of good clarity and color, command significantly higher prices per carat. The combination of increased grade and larger average stone size underscores the exceptional quality of the Lulo deposit and the efficiency of Lucapa’s recovery processes.

The Allure of the ‘Specials’

The Lulo project has become synonymous with the recovery of “specials” – an industry term for exceptionally large, high-value diamonds, typically over 10.8 carats. The third quarter of 2016 was particularly bountiful in this regard, with a total of 137 specials recovered. This represented a staggering 219% increase, an achievement that significantly enhances the project’s profile and revenue potential. Among these remarkable finds were several truly monumental stones, including a magnificent 172-carat diamond and an equally impressive 104-carat stone. The highlight, however, was the discovery of a rare and highly sought-after 39-carat pink diamond. Colored diamonds, especially pinks of significant size, are among the rarest and most valuable gemstones on Earth, often fetching record-breaking prices at auction. The consistent recovery of such prestigious diamonds solidifies Lulo’s reputation as one of the world’s most important sources for large, high-quality, and often colored, rough diamonds.

Robust Financial Outcomes

The impressive operational performance directly translated into strong financial results. During the quarter, three diamond sales were conducted, generating a gross revenue of US$10.3 million. This substantial inflow of capital is crucial for covering operational costs, funding future exploration, and returning value to shareholders. Furthermore, the year-to-date gross sales revenues for the Lulo project amounted to an impressive US$36.5 million. These figures not only demonstrate the immediate profitability of the operation but also highlight the consistent demand for Lulo’s high-quality diamonds in the global luxury market, a testament to their rarity and beauty.

Pioneering Recovery Technology: A Glimpse into the Future

Lucapa Diamond Company’s strategy isn’t just about maximizing current recovery; it’s also about investing in future capabilities. The company reiterated its earlier announcement regarding the commencement of the erection of new XRT (X-ray Transmission) technology and larger screens (55mm). This technological upgrade represents a significant leap forward in diamond recovery and underscores Lucapa’s commitment to innovation.

Understanding XRT Technology

XRT technology is a state-of-the-art sorting method that revolutionized diamond recovery. Unlike traditional grease tables or dense media separation, XRT sorters use X-rays to detect diamonds based on their unique atomic density. This method is particularly effective for recovering large diamonds, which can sometimes be missed by older technologies, especially if they are embedded within other materials. The implementation of XRT technology at Lulo is expected to significantly improve recovery rates, reduce diamond damage, and enhance the overall efficiency of the sorting process, thereby increasing the yield of high-value stones.

The Future: Unearthing Even Larger Treasures

The integration of XRT technology alongside larger screens (specifically 55mm) is designed to provide the capacity to recover individual diamonds up to an astounding 1,100 carats. To put this into perspective, the largest diamond ever found, the Cullinan Diamond, was 3,106 carats. While 1,100 carats is still a monumental size, this upgrade signals Lucapa’s belief in the Lulo project’s potential to yield diamonds of truly historic proportions. The Lulo project has already demonstrated its capability to produce large stones, and this technological advancement is a clear strategic move to ensure that no potential “monster” diamond is missed, further solidifying Lulo’s status as a premier source for the world’s most magnificent gemstones. This forward-thinking investment positions Lucapa to continue breaking records and supplying the luxury market with diamonds of unparalleled size and quality for years to come.

Conclusion: Lucapa’s Lulo Project – A Diamond in the Rough, Polished to Perfection

The third quarter of 2016 stands as a testament to the exceptional potential and expert management of the Lulo Diamond Project by Lucapa Diamond Company. With a remarkable 154% increase in production, a significant boost in grade and average stone size, and an impressive haul of 137 specials – including the iconic 172 ct, 104 ct, and the rare 39 ct pink diamond – Lulo has firmly cemented its position as a world-leading producer of large and high-value diamonds. The strong financial performance, with US$10.3 million in quarterly sales and US$36.5 million year-to-date, underscores the project’s economic viability and its contribution to the global diamond supply chain. Moreover, Lucapa’s proactive investment in advanced XRT technology and larger screens, with the capacity to recover diamonds up to 1,100 carats, signals a clear vision for the future. It’s a commitment not just to efficiency but to continually pushing the boundaries of what is possible in diamond discovery. As Lucapa continues to leverage its operational expertise and embrace cutting-edge technology, the Lulo Diamond Project remains poised to reveal even more of the Earth’s hidden treasures, further enriching the legacy of this extraordinary Angolan mine.