RE: Here comes the merger talk again. English translation (Thanks Nyoni):Lucara DIAMOND: INDICATIONS OF MORE LARGE DIAMONDS - CEO (Direct) Print
2013-05-17 14:25
ANTWERP (Direct) for the mining company Lucara Diamond May will be a record month in terms of sales revenue. The company has already completed one of the two quarterly sales of rough diamonds and next week sold a further 15 large and unusual stones in a special auction. Everything speaks in the current situation to the production goal for 2013 is to be achieved and hopes for more great bargains are high.
"In August and September we will break around the areas where we have already made valuable finds. Indications we have so far is that the presence of large, high quality stones continues," said CEO William Lamb to Direkt.
If expectations are met, it is not impossible that the Company holds an additional, previously scheduled, sales of large and rare diamonds sometime in the fall, according Lucarachefen.
Month's first sale of 51,000 carats of rough diamonds ended earlier this week. The result of these scheduled sales are published solely in connection with the interim reports.
"Lucaras diamond sales continues to improve with a strong performance in the third sales," says William Lamb, however.
In the first quarter Lucara sold about 144,000 carats diamonds, of which 127,000 from this year's production of over 32 million. The company is thus ahead of its own forecast of a production of 400,000 carats and revenues of $ 90 million for the full year 2013.
Expectations for the second quarter production is lower subordinates.
"We break in areas with lower average grade than before. Hopefully, however, we have about 50,000 carats to sell even at the second Annual sales for the quarter," said William Lamb.
The stable earnings has meant that the company has started to repay the loan of $ 50 million that funded the construction of Karowegruvan in Botswana. The loan is repaid with $ 8.3 million per quarter, but not even a significantly exceeded revenue budget would mean a more rapid rate of amortization.
"No, the cost of the loan is low and we prefer to have a degree of financial flexibility," said William Lamb.
Currently considering Lucara to invest in a cleaning facility for so-called deep-boiling of rough diamonds. So far, this technical and safety complex process performed in Antwerp, which has meant that the stones had shipped back and forth between Botswana and Belgium.
"There are a number of smaller producers in Botswana which could use such a facility in place., We even get to turn a profit on it," said William Lamb.
The cost of the as yet not decided the investment is approximately $ 450 thousand.
Lucara Diamonds ambitions to expand its operations and reduce operational risk by purchasing or developing new assets have yet to be realized.
The company's other major asset, Mothae deposit in Lesotho, is currently on hold while various development alternatives studied. A decision on the matter is not likely in the current year.
Some obvious acquisition target has not appeared, despite the last year generally weaker diamond market.
"We are looking at different assets, but it is something of a challenge to find the right property. Owners of good assets always feel that they are worth more than the current market price indicates and we are very, very careful in our due diligence process" says Lucaras president.
Another possible track is to merge with a local diamond producer in a similar situation.
"A merger with a similar company with producing assets could benefit us. With more mines in the portfolio to propagate the risks," says William Lamb.
Is this the most likely path forward?
"Yes, I think so., We have a positive net cash position and is an attractive partner," says Lucaras president.
Michael Bernander +46 8 5191 7917
Direkt