Lucara Diamond (TSX: LUC) experienced a rise in sales and earnings during the second quarter, largely due to the revival of its supply agreement with Belgium’s HB Antwerp, which purchases and polishes rough diamonds from the Karowe mine in Botswana.
Significant Increase in Net Profit
The Karowe mine, Lucara’s primary asset, generated $41.3 million in revenue, marking a 7% increase compared to the same period last year. Net profit more than doubled, reaching $11.4 million, up from $5 million the previous year.
Stable Pricing for Large, High-Quality Diamonds
Lucara’s agreement with HB, which involves the purchase of all diamonds weighing 10.8 carats or more from Karowe, significantly contributed to the revenue boost. The income from this deal increased by 15% year-on-year, reaching $29.5 million.
Unlike many of its closest rivals, Lucara produces a considerable quantity of large, high-quality diamonds, whose prices have remained stable compared to smaller, lower-quality stones, according to the Canadian miner.
“These exceptional stones, coupled with Lucara’s innovative sales strategies, allow us to navigate current market conditions effectively,” stated CEO William Lamb.
Special Diamond Recoveries Highlight the Quarter
From March to June, the company recovered 206 special diamonds, defined as rough stones weighing more than 10.8 carats, which accounted for 6.9% of the total carats recovered from processed ore.
Notable diamond recoveries during this period included a 491-carat Type IIa diamond, a 225.6-carat Type IIa diamond, and a 109-carat Type IIa diamond.
Progress on Karowe Mine Underground Expansion
Lucara also reported significant progress on the underground expansion project at the renowned mine during the quarter, with production from the new section expected to begin in early 2028.
The company highlighted that this project is set to extend the life of the Karowe mine until 2040
