Lucara upbeat on stabilised diamond market

LUCARA Diamond Corp. CEO William Lamb took an upbeat view of the diamond market saying it had probably bottomed out in the fourth quarter while producer price cuts would spur a gradual recovery.Commenting in the Toronto-listed firm’s annual results on Friday (February 21), Lamb said difficult trading conditions had resulted in positive developments such as Indian manufacturers “exploring new markets”. Prices for lab-grown diamonds had also fallen further as production outweighed demand, he said.“While the influx of Angolan rough diamonds and the subdued demand for polished diamonds, especially from China, have led to price corrections, particularly in smaller sizes, the industry sentiment suggests that the market may have reached its bottom during [the] fourth quarter 2024,” he said in the firm’s results commentary.“A gradual recovery is expected to be driven by increasing demand for larger diamonds due to reduced production, and the overall long-term demand for natural diamonds,” he said.“As the industry moves into 2025, buyers are exercising prudent inventory management while holding firm on polished prices, which could lead to a healthier and more sustainable market in the long run,” he said, while also praising the responsiveness of De Beers and Alrosa to lower prices.Sustained poor diamond prices have taken their toll on diamond companies in the last 12 to 18 months. In February, Petra Diamonds parted ways with its CEO of five years Richard Duffy amid continuing cash flow problems while a $2.9bn write-down of De Beers took its 85% shareholder Anglo American into a $3.1bn headline earnings loss for 2024 financial.Lucara reported a turnaround in share earnings for the 12 months ended December which came in at 10 US cent per share compared to a 0.01c/share loss in the 2023 financial year. The company ended the year with $22.8m with cash on hand (2023: $13.3m).An improvement in the diamond market, and continued recovery of high-value stones for which Lucara is renowned, will help ease pressure on the company to complete its Karowe underground expansion.The project, which is planned to replace mining from the Karowe open pit, ran into development problems in 2023 resulting in a project overshoot on budget and timeline. The firm said last week the total cost to completion of the underground expansion was $684.3m. So far $347.9m of the project has been spent.Mill feed from the open pit will be exhausted this year but Lucara plans to keep production sustained through stockpiled material. That will sustain the company until the end of 2027 when first production from underground is scheduled to begin.Said Lucara in its results announcement: “The long-term outlook for diamond prices, combined with the potential for exceptional stone recoveries and the continued performance of the open pit could mitigate the modelled impact on project cash flows due to the changes in schedule. The company continues to explore opportunities to further mitigate the modelled impact.”In August, Lucara announced the recovery of its latest large diamond, the 2,492 carat Motswedi. It follows similarly significant discoveries including the 1,109 ct Lesedi La Rona. The company said earlier this month that it had concluded the sale of two diamonds – the 549 carat Sethunya diamond and the 1,080 carat Eva Star – for a total of $54m.The post Lucara upbeat on stabilised diamond market appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com