From Will P tonight’s Stockwatch Lukas Lundin and Eira Thomas's Lucara Diamond Corp. (LUC), down one cent to $2.17 on 1.29 million shares, has hired Ayesha Hira as vice-president of corporate development and strategy. The move suggests that Lucara is on the prowl for a new project, presumably in diamonds. Ms. Hira describes herself as an experienced executive who started out as a geologist, working initially in diamond, base metals and gold exploration before she "transitioned to capital markets."
The transition came quickly: The Queens University graduate spent just five years as a geologist after graduation -- the first three as a contract geologist, the last two with De Beers Canada. In 2000, Ms. Hira went to work for CIBC Capital Markets and in 2004 she moved over to RBC Capital Markets. For the past four years, she has been a mining specialist dealing with institutional equity sales for Jeffries Financial Group, based in London.
Ms. Hira "injects important skills and experience into our business at the right time," says Ms. Thomas, Lucara's president and chief executive officer since Dr. William Lamb "retired" in February. (He retired from Lucara, not from work: Within days, he became lead director of Bluestone Resources Inc. (BSR: $1.40).) Ms. Thomas lauds her new vice-president as being "ideally suited to leading an assessment of potential growth opportunities for Lucara going forward," but she will also be looking backward, handling corporate communications and shareholder relations for Lucara and its Clara Diamond Solutions, which it acquired in February.
Perhaps Ms. Hira will have a soothing story to tell regarding the Clara acquisition. Lucara paid $29-million initially for Clara by issuing 13.1 million shares, and it must issue 13.4 million more, should Clara's revenues hit unspecified performance milestones. Lucara's retail shareholders were perplexed with the deal at the time, with some questioning what Clara would do for them. Ms. Thomas and her crew told them that Clara's primary asset is a "secure, digital diamond sales platform that combines proprietary analytics with existing cloud and blockchain technologies to transform how rough diamonds are sold," an answer that was clear as mud. (They may have a better idea later this year, when Lucara starts using Clara's system to sell rough from Karowe.)
What was crystal clear is that some of Lucara's insiders are profiting from the deal. Ms. Thomas, a Clara founder, received nearly 1.2 million Lucara shares initially and she could get 1.79 million more if Clara hits its milestones. As well, Catherine McLeod-Seltzer, another Clara founder and a Lucara director, got 400,000 shares and stands to get 600,000 more. Two other Lucara insiders, John Armstrong, vice-president of mineral resources, and Zara Boldt, chief financial officer, also received modest numbers of shares.
As well, Lucara also agreed to a profit-sharing mechanism, up to $60-million of stock not being enough of a profit to share. Clara's "founders and facilitators" will receive 13.33 per cent of the annual earnings before interest, taxes, depreciation and amortization (EBITDA) generated by Clara. Further, Clara's management will also get 6.67 per cent of the annual EBITDA from the platform. The payments, a total of 20 per cent of EBITDA over 10 years, are capped at $25-million (U.S.) per year. (Ms. Thomas stands to get 3.45 per cent of EBITDA while Ms. McLeod-Seltzer is in line for 3.22 per cent.)