Lucapa Diamond Company Achieves Over $35 Million in Year-to-Date Sales from High-Value Lulo and Mothae Mines

Lucapa Diamond Company, a leading junior diamond miner, has announced robust year-to-date diamond sales exceeding an impressive US$35.5 million. This significant achievement stems from its two primary assets: the Lulo alluvial mine in Angola and the Mothae kimberlite mine in Lesotho. These latest sales figures highlight Lucapa’s consistent ability to recover and market exceptional, high-value diamonds, solidifying its position in the premium segment of the global diamond industry.

Strong Performance from the Lulo Alluvial Mine, Angola

The Lulo mine, renowned for its prolific output of large and exquisite diamonds, continues to be a cornerstone of Lucapa’s success. In its most recent sale, Lucapa successfully transacted a parcel of 3,558 carats of Lulo diamonds, generating US$4.4 million at an outstanding average price of US$1,234 per carat. This strong sale has propelled Lulo’s total year-to-date sales for 2019 to an impressive US$26.5 million, with an average price per carat of US$2,764. The higher year-to-date average reflects the consistent recovery of large, high-quality stones from the rich alluvial deposits of Lulo.

Significantly, this latest Lulo sale deliberately excluded a truly remarkable gem: the high-value 46-carat Lulo pink diamond. Pink diamonds are among the rarest and most sought-after colored diamonds globally, commanding premium prices due to their unique beauty and scarcity. Lucapa and its Lulo partners have strategically chosen to withhold this extraordinary stone from rough sale. Instead, they are meticulously considering options for cutting and polishing it themselves. This “beyond the mine gate” strategy aims to capture additional margins and unlock the full inherent value of such an exceptional diamond by transforming it into a finished, market-ready jewel. This approach allows Lucapa to participate further along the diamond value chain, enhancing profitability and brand recognition. Furthermore, the company anticipates holding a second rough diamond sale for Lulo-produced diamonds before the end of September 2019, indicating continued strong production and market activity.

Mothae Kimberlite Mine in Lesotho Delivers Consistent Value

Complementing the Lulo mine’s performance, Lucapa’s Mothae kimberlite mine in Lesotho has also contributed substantially to the company’s strong sales figures. Mothae is recognized for its consistent recovery of Type IIa diamonds and other high-quality stones. A recent parcel comprising 4,376 carats of Mothae diamonds successfully sold for US$1.8 million, demonstrating the mine’s steady contribution to Lucapa’s revenue streams.

Similar to the strategy employed with the Lulo pink diamond, a magnificent 36-carat, D-color stone recovered from Mothae was deliberately withheld from the recent sale. D-color diamonds represent the highest possible color grade for white diamonds, indicating a complete absence of color and extreme rarity. The decision to consider this significant diamond for cutting and polishing underscores Lucapa’s commitment to maximizing returns by extending its involvement beyond the initial extraction phase. This strategic move aims to leverage the expertise of master cutters to reveal the diamond’s full potential brilliance and value, thereby capturing a greater share of the profit margins typically reserved for cutters, polishers, and retailers.

These latest transactions have brought Mothae’s total sales for 2019 to date to US$9.0 million, achieving an average price of US$539 per carat. This consistent performance highlights Mothae’s role as a reliable source of quality diamonds within Lucapa’s diverse portfolio. Adding to its list of notable recoveries, Mothae recently yielded a remarkable 64-carat D-color Type IIa diamond. Type IIa diamonds are chemically pure and structurally perfect, often displaying exceptional optical transparency, making them highly prized in the luxury market. Such significant finds reinforce Mothae’s potential to continue producing large, high-value stones that attract premium buyers globally.

Strategic Value Creation: Beyond the Mine Gate

Lucapa’s proactive strategy of withholding specific, exceptionally high-value rough diamonds for potential in-house cutting and polishing represents a crucial shift in maximizing shareholder value. Traditionally, mining companies sell rough diamonds to sightholders or at auctions, passing on the significant value addition that occurs during the cutting, polishing, and marketing phases. By electing to participate in these downstream processes, Lucapa aims to unlock a greater portion of the final retail value. This approach not only promises higher profit margins for these individual exceptional stones but also allows Lucapa to build a deeper understanding of the luxury diamond market, potentially forging direct relationships with high-end buyers and retailers. This strategic decision aligns with a broader industry trend where miners seek greater control and value capture across the entire diamond supply chain, from earth to finger.

Lucapa’s Position in the Global Diamond Market

In a dynamic global diamond market, Lucapa Diamond Company distinguishes itself through its focus on unique, high-quality assets capable of producing large and rare stones. While the broader diamond market can experience fluctuations, the demand for exceptional, investment-grade diamonds remains consistently strong. The Lulo and Mothae mines, with their track record of delivering significant D-color, Type IIa, and rare pink diamonds, position Lucapa uniquely to cater to this discerning segment of the market. The company’s robust year-to-date sales figures are a testament to the quality of its diamond portfolio and its effective sales strategies, allowing it to navigate market conditions successfully and generate substantial revenue.

Future Prospects and Sustained Growth

With year-to-date sales already exceeding US$35.5 million, Lucapa Diamond Company is demonstrating exceptional operational and financial performance for a junior miner. The strategic decision to internally evaluate and potentially process high-value stones like the 46-carat Lulo pink diamond and the 36-carat Mothae D-color diamond points towards a future of enhanced value creation. These initiatives, combined with ongoing exploration efforts at both mines and commitment to efficient recovery, indicate a strong trajectory for Lucapa. The company is well-positioned to continue leveraging its world-class assets to generate significant returns for its stakeholders, reinforcing its reputation as a consistent supplier of some of the world’s most sought-after precious stones.

Lucapa’s continued success in recovering and selling high-value diamonds from both its Angolan and Lesotho operations underlines its strategic acumen and the exceptional quality of its diamond deposits. As the company looks towards future sales and the potential for increased value capture through its ‘beyond the mine gate’ strategy, it remains a compelling entity in the global diamond mining landscape, poised for continued growth and significant contributions to the luxury diamond market.

New Source: idexonline