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Lucara Diamond Corp T.LUC

Alternate Symbol(s):  LUCRF

Lucara Diamond Corp. is a Canadian diamond mining company with a producing mine and exploration license in Botswana. It is an independent producer of large Type IIa diamonds from its 100% owned Karowe Diamond Mine in Botswana. The Karowe Mine is the focus of the Company's operations and development activities. Its 100% owned Karowe mine is a producer of large Type IIA diamonds, more than 10.8 carats, including the historic 1,758 Sewelo, the 1,109 carat Lesedi La Rona and the 813-carat Constellation.


TSX:LUC - Post by User

Bullboard Posts
Comment by nyonion Jul 06, 2018 4:44am
149 Views
Post# 28276415

RE:Talking about Royalties

RE:Talking about Royalties
The mechanism for how Clara achieves its revenue has not been revealed yet.

However, since Clara is a fully owned subsidiary of Lucara it seems to me that they cannot sell the stones in their own right.

Furthermore, the Govt of Botswana is due 10% royalty on any stones sold by Lucara.

The only scheme that makes sense to me is that Clara must bill the buyer with an additional royalty on top of the price they pay Lucara.

The only way I can see this working to the advantage to all 3 parties to the sale (LUC, Govt and Buyer) is if the royalty levied by Clara were significantly lower than the profit that the erstwhile middlemen would have taken. This apparently would be the case, and significantly so.

Bullboard Posts