This partnership, which involves the purchase and polishing of rough stones from Lucara’s flagship Karowe mine in Botswana, has played a key role in the company's recent financial success.
Revenue and Profit Surge
The Karowe mine generated $41.3 million in revenue during Q2, marking a 7% increase compared to the same period last year. The company's net profit more than doubled, soaring to $11.4 million from $5 million a year earlier, underscoring the positive impact of the revived HB Antwerp deal.
Lucara’s agreement with HB, which involves the sale of all diamonds over 10.8 carats mined at Karowe, was a significant contributor to the overall increase in sales. Revenue from this deal rose by 15% year-on-year, totaling $29.5 million.
A Focus on Large, High-Quality Diamonds
Lucara’s strategic focus on producing large, high-quality diamonds continues to set it apart from many of its competitors. While the pricing for smaller, lower-quality diamonds has been volatile, the value of Lucara’s exceptional stones has remained stable. This stability has been a key factor in the company’s ability to navigate current market conditions effectively.
“These exceptional stones, coupled with Lucara’s innovative sales strategies, allow us to navigate current market conditions effectively,” said William Lamb, Lucara’s CEO. His comments reflect the company’s confidence in its business model, which emphasizes the production and sale of high-value diamonds.
Exceptional Diamond Recoveries
During the quarter, Lucara recovered 206 special diamonds, defined as rough diamonds weighing more than 10.8 carats. These special stones represented 6.9% by weight of the total carats recovered from processed ore. Among the significant recoveries were a 491-carat Type IIa diamond, a 225.6-carat Type IIa diamond, and a 109-carat Type IIa diamond—each showcasing the exceptional quality that Karowe is known for.
Progress on Underground Expansion
In addition to its strong financial performance, Lucara made notable progress on the underground expansion project at the Karowe mine. This development is expected to extend the mine's life until 2040, with production from the new section anticipated to begin in early 2028. The expansion is a critical part of Lucara's long-term strategy, ensuring continued access to the rich deposits that have made Karowe a leading source of high-quality diamonds.
Looking Ahead
Lucara’s strong second-quarter performance highlights the effectiveness of its strategic partnerships and focus on high-value diamonds. As the company continues to recover exceptional stones and advance its underground expansion, it remains well-positioned to maintain its leadership in the diamond industry and deliver sustained value to shareholders.
