Diamonds are certainly Lucapa’s best friend as the miner heads for profit in 2019
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Diamond hunter Lucapa (ASX:LOM) is expecting to start making a profit this year after some mammoth sales of the sparkling gems from its African mines.
In the first half of 2019, the company recovered 20,504 carats and banked $US29.4m ($41.9m) from sales.
Shares edged up over 3 per cent to 16 cent on Monday morning.
It has just completed a second diamond tender in Antwerp and is scheduled to complete another one this month.
Lucapa said it is transitioning to the higher-margin diamond zones at its Mothae mine in Lesotho and diamond carat production and grades are 20 per cent ahead of plan.
The largest gem-quality diamond recovered so far at Mothae – its second operating mine – amounted to 126 carats.
Cash operating costs at the mine are also 14 per cent better than expected at $US12.56 per tonne.
In total, three Mothae diamond sales are scheduled for the second half, compared to two sales in the first half.
Late last year, Angola decided to let diamond miners sell their wares on the international market instead of requiring them to be sold through a central state-owned government agency.
This is proving very profitable for Lucapa, with the company netting an “exceptional average price” for its diamonds from the Lulo mine.
Lucapa booked $US22.1m from the sale of Lulo diamonds in the first half on the back of an average price of $US3,668 per carat. The next sale of Lulo diamonds is scheduled for July.
The company still has 7,001 carats in its inventory, including a 130-carat Lulo diamond and a 126-carat Mothae diamond.