- Diamond prices decline
Gem diamond producer, Lucara Diamond Corporation said production outlook for 2020 remains uncertain, so much that it has suspended its bullish 2020 outlook, Eira Thomas, President & Chief Executive Officer (CEO) has said.
Lucara completed its 1st quarter 2020 diamond tender on 5 March 2020 and achieved sales prices within 1 percent of forecast, however diamond prices have since deteriorated in response to weaker demand due to the spread of COVID-19.
Despite Lucara’s 2nd quarter 2020 diamond tender being scheduled to take place in May 2020, the full impact of COVID-19 on Lucara’s operations and production outlook for 2020 remains highly uncertain, and as a result Thomas said Lucara has suspended its 2020 guidance.
According to Thomas, Lucara’s revenue was forecast to be between $180 million and $210 million in 2020. Further, the company’s ore mined, was expected to be between 3.5million and 3.9 million tones, while waste mining was expected to be between 3.6 million and 4.2 million tones.
Further, tonnes processed were expected to be between 2.5 million and 2.8 million tonnes, consistent with the strong operating performance achieved in 2018 and 2019. Diamond recoveries were also expected to be between 370,000 carats and 410,000 carats; while diamonds sold were expected to be between 350,000 carats and 390,000 carats. As a result of COVID-19, Lucara has recalled their expectations and projections since they will be seriously affected by COVID-19.
At present Lucara has not identified any obstacles to continued safe operations of its mine and sales office. Lucara’s 2020 capital spend (capex) program is being reviewed. The major portion of capex relates to the $53million Karowe underground expansion project. The underground program and capex for 2020 retain optionality and flexibility as the expenditures are to be incurred and not committed and can be adjusted once Lucara’s outlook becomes more certain.
As a result of the vesting of employee share units, the number of issued and outstanding shares of Lucara have increased to 396,896,733 as at 31 March 2020