Lucara Diamond Company recorded increased revenue to $120 million in the second quarter of 2022 as diamond prices continues to rise despite global economic uncertainties. In its quarterly report ended June 2022, Lucara stated that strong rough and polished diamond market fundamentals continue, despite growing global economic uncertainties.
Revenue from sales transacted on Clara during the three months ended June 30, 2022 totalled $9.4 million, a 13 percent increase from the $8.3 million in revenue earned in the comparative quarter Lucara President, Eira Thomas said diamond market continued its strong performance during the second quarter of 2022 with minor price corrections observed.
She highlighted that solid market fundamentals supported diamond prices despite growing concerns of a global economic slowdown as high levels of reported inflation persisted and governments respond with increasingly forceful measures in attempts to reduce it to sustainable levels.
“In Q2, Lucara celebrated 10 years of continuous operations at its 100 percent owned Karowe Diamond Mine and delivered production on plan in combination with healthy diamond sales, reflecting stable polished diamond demand and a continued positive outlook for diamond prices longer term.”
Thomas revealed that third party volumes on Clara also continued to grow during the quarter, with Karowe goods reliably supplemented in each completed sale. “Momentum on the underground expansion continues to ramp up as we began the transition towards the main shaft sinking phase; Lucara maintains access to ample liquidity to support of its growth plans”. In 2020, Lucara announced a partnership agreement with HB, entering into a definitive sales agreement for diamonds recovered that exceed 10.8 carats from Karowe Diamond mine in Botswana.
Under the amended sales agreement, +10.8 carat gem and near gem diamonds from the Karowe Mine of qualities that can directly enter the manufacturing stream are being sold to HB at prices based on the estimated polished outcome of each diamond.
For the three months ended June 30, 2022, the Company recorded revenue of $32.4 million from the HB agreement, compared to revenue of $30.7 million in the second quarter of 2021. Thomas also explained that diamond market fundamentals continued to support healthy prices as steady demand and some inventory shortages were reported.
She said natural variability in the quality profile of the 10.8 carat production in any production period or fiscal quarter results in fluctuations in recorded revenue and associated top ups between periods. “As a result of the sales agreement with HB, the Company also participated in polished diamond price increases during Q2 2022 as rough diamonds sold to HB in previous quarters were polished and sold.”