Lucara to sell digital diamond sales company to former CEO

LUCARA Diamonds announced on Monday it had sold its digital diamond sales channel as it focussed on the commissioning of Karowe mine’s expansion project.William Lamb, president and CEO of Lucara added the ambition of the sales channel, dubbed ‘Clara’, to have other diamond producers supply to it was “unattainable” whilst it was owned by a pure-play miner such as itself.Clara, founded nine years ago, will be sold to its original backer, a group led by the HRA Group of Companies and Eira Thomas, Lucara’s former CEO.Clara will be sold for $3m in cash and 13.4 million Lucara shares which at the diamond miner’s current share price is worth C$5.9m (U$4.3m). Lucara will also retain a 3% net profit interest in Clara’s net earnings.Clara accounted for about 12% of diamond revenue in Lucara’s first quarter this year (May) with the majority of the firm’s diamond sales earned through an agreement with HB Group, a cutter and polisher. Of $4.9m in sales to Clara in the quarter, only 33% were third party stones with the balance from Karowe, Lucara’s mine in Botswana.However, Lucara will retain a 3% net profit interest on Clara’s net earnings. It has also agreed to supply Clara with diamonds for five years in the one carat to 15 carat category size it customarily sells. There is an option to terminate the sales agreement after the second anniversary or as otherwise mutually agreed between the parties, Lucara said.Far more important for Lucara is the successful commissioning of the Karowe expansion, scheduled for the first half of its 2028 financial year. Initially estimated at just over $500m in capital expenditure, the project cost was increased 25% to $683m in 2023 amid 18 month delays to its schedule.This combined to put severe pressure on Lucara’s balance sheet which was worsened by a steep decline in diamond prices from which the market has not yet recovered. Thomas resigned her position as the company was recapitalised.The revised forecast of costs at completion is $683.0 million (including contingency). As at June 30, 2024, capital expenditures of $336.3 millionhad been incurred and further capital commitments of $69.7 million had been made.Karowe yields some of the largest diamonds globally. In September, a 1,094 carat diamond was recovered from the mine less than a month after the company announced the recovery of a 2,492 carat diamond – the largest since the 3,106 carat Cullinan diamond was discovered in 1905.The post Lucara to sell digital diamond sales company to former CEO appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com