Lucara Diamond (TSX: LUC) is the latest miner to inject some optimism into a depressed market that was hit this year by an unforeseen oversupply and increasing demand for lab-made gems by announcing better than expected sales in December.
The Vancouver-based company, which operates the prolific Karowe mine in Botswana, fetched US$52.9 million in the final tender held last week. The figure represents an average price of US$548 per carat — about 40% higher than the company’s average price achieved in the previous quarter.
The proceeds also exceeded expectations by 16%, Lucara said, which suggests the market for rough diamonds is finally turning a corner.
The December tender puts Lucara’s 2019 revenue at US$192.5 million, beating the annual revenue guidance of US$170 million to US$180 million.
“Though it is too early to call a trend, prices achieved in our final sale of the year reflect a stronger, more stabilized market environment and continued strong demand for Karowe diamonds,” chief executive Eira Thomas said in the statement.
Thomas noted that sales through Clara, its secure, web-based, digital sales platform, continued to increase this year as it grew its customer base well beyond expectations from four to 27 clients.
Demand in recent online sales, Lucara noted, has now outstripped available supply, and the platform is ready to receive a larger quantity of third-party goods to support its next phase of growth. Trials with at least two other providers are anticipated to begin early next year, the company said.
Lucara’s news comes on the heels of Anglo American’s (LON: AAL) De Beers results for its last sale of the year, which also showed early signs of stabilization in the sector.
The world’s number one diamond miner by value sold US$425 million worth of diamonds this month, a slight improvement from the $400 million it obtained in the previous tender, but still US$1.4 billion less than in 2018.
This article first appeared in our sister publication, Mining.com. https://www.mining.com/lucara-diamond-sales-beat-expectations-in-fresh-sign-of-market-improvement/