Lucara acquired a majority stake in the AK6 project from De Beers in December 2009, and later bought the African Diamonds stake in 2010 to own the mine 100 percent. Lucara’s latest discovery at Karowe, is just a continuation of the mine’s consistent production of high-value stones. In a previous interaction with this publication, Marketing Operations Manager, Steve Lincoln told of how Karowe’s first of a high-value in March 2013 was a game changer, as it opened up discovery significant stones.
The mine was completed in 2012, to the tune of US$120 million.(Around P1.2 billion) as an operation that comprised of an open pit mine, crushers, AG mill and a Dense Media Separator (DMS) recovery plant.
The mine has an annual production of approximately 400,000 carats of gem quality (including Type IIa) diamonds which are sold through regularly scheduled tenders throughout the year. Of importance, in addition to its regular diamond production, the Karowe mine has been producing some very large, exceptionally high quality diamonds (including some colored stones). These exceptional stones are sold by special tender as recovery dictates.
DISCOVERING THE BIG STONES
In January 2013, the company, headed by Chief Executive Officer (CEO) William Lamb recovered two rare Type II blue diamonds at its Karowe Mine (weight, 4.77 carats and 0.2 carats) in addition to the blue diamond it recovered in 2012.
Further, a final sale of Mothae diamonds recovered from the test mining phase of the Mothae Project was held in February for proceeds of US$1.5 million. Two months later, a 239 carat gem quality diamond was recovered at the Karowe Mine, the first of a population of large diamonds recovered from the Centre and South lobes of the Karowe Mine in 2013. It was the beginning of the good times for Lucara. Rarer gem diamonds were yet to follow.
After the consecutive recovery of the ‘big stones’ the Company in May held, in addition to its regular stone tenders, its first Exceptional Stone Tender of 15 diamonds from its Karowe Mine for gross revenues of US$24.5 million, an excess of a quarter of a P1 billion in Botswana currency. As if it was not enough for the year, a second Exceptional Stone Tender was held in September resulting in a sale of 16 stones for gross revenues of US$24.7 million, still an approximately quarter of a billion Pula.
A third Exceptional Stone Tender was held in November of 14 stones for US$22.9 million, still around half a billion in local currency. In total, 45 diamonds from its Karowe Mine were sold in the three dedicated Exceptional Stone Tenders for total proceeds of US$72.1 million ( Around P800 million.
In November, the Company repaid in full the outstanding balance of the US$50 million (almost half a billion) debenture issued in 2011 to fund development of its projects. A total of 10 sales of rough diamonds from the Karowe Mine were held in 2013. Three of the sales were dedicated to Exceptional Diamonds extracted from the run-of-mine and marketed separately. A total of 438,717 carats were sold generating gross revenues of US$181 million, this was just over P1.9 billion.
On February 24, 2014, the board of directors approved a a dividend policy providing for the payment of semi-annual dividends and from time to time, payment of a special dividend based on revenues generated from Exceptional Stone Tenders, subject to the Company’s overall financial position and other factors existing at the time under consideration. In April, the Canadian company held its first Exceptional Stone Tender for 2014, selling 20 diamonds from its Karowe Mine for gross revenues of US$50.5 million (just over half a Billion). Its first ever semi-didend was paid on May 8, after the Company declared its first semi-annual dividend of CDN$0.02 per share (CDN$0.04 annually) for payment in June 2014.
In July, Lucara concluded its second Exceptional Stone Tender for 2014 for proceeds of US$40.1 million (Over P400 million) another exceptional stone tender was held in October, a third one for that year.
The sale of 14 stones included 7 Type IIa diamonds of greater than 100 carats and featured a magnificent 204 carat stone. Gross revenues of US$46.4 million (Around P500 million) were generated. November the 10th, the operators of Lucara declared a semi-annual dividend of CDN$0.02 per share and a special dividend of CDN$0.04 per share for payment in December 2014.
A total of 10 sales of rough diamonds from the Karowe Mine were held in 2014. Three of the sales were Exceptional Stone Tenders. A total of 412,136 carats were sold generating gross revenues of US$265.8 million,(approximately P2.8 billion).
In April 2015, the Company announced the recovery of a 342 carat gem quality diamond at its Karowe Mine. This stone subsequently sold for US $20.55 million, just around P250 million.
In August, the ongoing recovery of Exceptional Diamonds was announced including a further 336 carat stone, a 184 carat stone, a 94 carat and an 86 carat stone.
The Company made diamond history in November 2015 with the recovery of a 1,111 carat Type IIa diamond (1,109 carats post cleaning) at its Karowe Mine. The largest gem quality diamond recovered for a century and the second largest ever recovered. Lucara also announced the recovery of two further Exceptional Stones in November, an 813 carat stone and a 374 carat stone.
The Company paid two dividends in 2015, of CDN$0.02 per share for a cumulative dividend of CDN$0.04 per share. In December 2015, the move to a quarterly dividend commencing in 2016 was announced.
A total of eight sales of rough diamonds from the Karowe Mine were held in 2015. Two of the sales were Exceptional Stone Tenders. A total of 377,136 carats were sold generating gross revenues of US$223.8 million around P2.5 billion.
THE HISTORIC DISCOVERY
After unearthing the 1,109 carat diamond that was later named Lesedi La Rona, a massive stone that it continues to hold in an inventory as at September30, 2016, the company is yet to sell the second largest stone to ever be discovered in history. The company held an auction sale of Lesedi La Rona last year at London and the only bid it got was US$50 million, which was lower than the minimum expected bid of US$70 million. The company is yet to sell the stone. Lesedi La Rona was discovered alongside another 812.77 carat, Type lla diamond.
In May 19 this year lamb announced that the exceptional 812.77 carat, Type IIa diamond recovered from the Karowe mine in Botswana in November 2015 has been sold for US$63,111,111 , approximately P685 million in Botswana currency. The diamond sold for US$77,649 per carat. Lucara had partnered with Nemesis International DMCC, and retains a 10 percentinterest in the net profit received from the sale of the resultant polished diamonds. The 813 carat diamond has been named, “The Constellation.
The sale of the 813 carat diamond is the highest price ever achieved for a rough diamond, breaking all records.
By the time Lesedi La Rona was discovered, approximately 2108 high value stones have been discovered by the Canadian mining house, and it was still counting. Of these, Lincoln said 230 stones were above 50 carats, 84 have been above 100 carats while 18 of those have been above 200 carats.
Lincoln said De Beers’ decision to sell Karowe mine at U$49 million (Just around P500 million) was Lucara’s biggest gain. What pleases him the most is that Lucara shareholders have gotten over 100 percent return on investment (ROI) and are now enjoying profitability.
Shareholders of the Canadian mining outfit, Lucara Diamond Corp, have been paid an approximate P1.5 billion in dividends, perhaps the largest ever dividend to be paid in a single year, by companies trading on Botswana Stock Exchange (BSE).
The company announced this week that during the first six months of 2016, earnings per share were $0.17 per share, about P2 per share. This was however a significant growth from $0.04 (just around P0.50) EPS seen during the first six months of 2015.
In July 2016, the Company declared and announced a special dividend of CA$0.45 per share in addition to its quarterly dividend of CA$0.015 per share for a total payment of CA$177.5 million (approximately P1.5 billion) to be paid on September 15, 2016.
“The special dividend along with the forecast full year quarterly dividend payments is expected to total CA$0.51 per share in 2016 which equates to a dividend yield of 12 percent based on the share price of CA$4.18 on August 4, 2016,” Chief Executive Officer (CEO) William Lamb.
He said the company’s commitment to reward its shareholders based on its results, while maintaining a robust balance sheet for future growth resulted in the Company announcing an exceptional special cash dividend of CA$172 million in addition to its regular dividend this year.
Revenue for the first half (H1) of 2016 was $191.4 million (Over P2 billion) or $1,233 per carat (P13.378).