Lucapa Reports Gross Rough Diamond Sales of US$ 9.9 Million in Q1 2020

Lucapa Diamond Company Limited

Lucapa Diamond Company, releasing a report of its activities and results for the quarter ended March 31, 2020 said that while the year had started on a very positive note, the company and its operations (Lulo mine in Angola and Mothae mine in Lesotho) have subsequently been impacted, like most other businesses, by the widespread uncertainty and disruption caused by the COVID-2019 pandemic.

The report also noted that the quarter saw the volume of ore processed reach record levels of 440,136 tonnes, reflecting the immediate benefit of completed SML expansion at Lulo. During the three months, other highlights include recovery of 11,7441 carats – including 273 individual diamonds weighing +4.8 carats and recovery of 14th +100 carat diamond at Lulo and 12th +50 carat diamond at Mothae. There also was a 25% increase in carats and 14% increase in average US$ per carat values in Updated Lulo Alluvial Diamond Resource.

Lucapa said that gross rough diamond sales from its Lulo mine in Angola and Mothae mine in Lesotho totaled US$ 9.9 million at an average price of US$ 1,086 per carat.

The Company also reported that during the quarter it received highly-encouraging Lulo kimberlite exploration results in the Canguige river and that four high-priority Lulo kimberlites were drilled to identify best locations for bulk samples.

The quarter also witnessed the company’s first earnings from cutting & polishing partnerships.

During the three months, there were reductions in the cash operating cost per unit at both SML and Mothae.

At the end of the period, Lucapa held US$1.7m cash balance while Mothae has an inventory of 4,780 carats. The SML, the JV which owns Lulo, held US$6.7m cash and receivables balance and 3,037 carats in inventory (non-consolidated).

During the quarter both the major operations of the company were affected by the lockdowns in their countries. The National State of Emergency was declared in Angola by the President, His Excellency Joao Lourenco, in the last week of March 2020 (and has subsequently been extended twice).

The lockdown measures outlined in the Presidential Decree do allow certain industrial activities to continue, including mining. However, in the interests of ensuring the health and safety of staff, the activities on the concession have been reduced to essential operations with camp-based staff until the authorities advise otherwise or the National State of Emergency is lifted. Lucapa, its partners, and Lulo management are working with the authorities to re-commence normal mining activities when health protocols permit and the global markets recover.

Similarly, operations at Mothae, Lesotho have been affected by a 21-day lockdown in South Africa and its subsequent extension leading Lucapa to suspend mining operations at the Mothae kimberlite mine, due to restrictions in the flow of essential mining supplies and services across the border from South Africa and to protect the health and safety of staff.

A care & maintenance program is being implemented at Mothae in Lesotho to ensure the asset is preserved and well-positioned to recommence mining operations when health protocols permit and the global markets recover, Lucapa said.

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Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.

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