Lucara Announces 2019 Annual Results
2019 was another strong year for the recovery of Specials (single diamonds in excess of 10.8 carats) from direct fake designer bags milling ore with 786 stones totaling 24,424 carats recovered, including 31 diamonds in excess of 100 carats, of which 2 stones were in excess of 300 carats including the historic 1,758ct Sewel diamond. Specials were also recovered in treatment of historic, pre XRT recovery tailings, including a 375 carat stone in Q3 2019. No further treatment of historic recovery tailings is expected.
Operating cash costs for the year ended December 31, 2019 were $31.88 per tonne processed (2018: $39.92 per tonne processed) compared to the full year forecast cash cost of $32 $37 per tonne processed (Non IFRS measure). Operating cash cost per tonne processed was positively impacted by a combination of higher tonnes processed and lower overall tonnes mined as planned in 2019 following the completion of a waste stripping campaign in 2018. Cost optimization initiatives and favorable foreign exchange contributed to the lower operating cash cost per tonne compared to guidance. Operating cash costs for 2020 are expected to continue to trend between $32 $36 per tonne processed.
During the first three quarters of 2019, the Company paid a CA$0.025 quarterly dividend, returning $22.4 million (CA$0.075 per share) to shareholders in 2019 (2018: $30.3 million or CA$0.10 per share). Since inception in June 2014, the Company has paid dividends of $271 million (CA$349 million).
Eira Thomas, President CEO commented: “Our strong operating results for 2019 reflect Lucara’s continued focus on safe, reliable operations which has delivered increased productivity at lower costs and provides a solid foundation to support our next stage of growth an underground expansion at Karowe which has the potential replica louis vuitton bags from china extend our mine life to 2040, add net cash flow of $1.22 billion and gross revenues of $5.25 billion. Our second business, Clara, continues to deliver solid results and is on track to steadily grow third party supply to the platform over replica louis vuitton the course of the coming year. In 2019 Lucara also continued to explore ways and means to maximize the value it receives for its diamonds. Our ground breaking agreement with Louis Vuitton in January 2020 is another example of how we are delivering on this commitment. Through this agreement, we will demonstrate that greater collaboration within the supply chain can unlock value and increase transparency from mine to consumer.”
In November 2019, the Company announced the results of a positive feasibility study for development of an replica louis vuitton bags underground mine at its 100% owned Karowe Diamond Mine. Concurrently with the announcement of the feasibility study, Lucara’s Board of Directors determined that it would be in the best interest of the Company and its shareholders to suspend the quarterly dividend payment of C$0.025 per share, effective as of Q4 2019. The feasibility study demonstrated the potential to extend the mine life at Karowe to 2040 while generating significant economic benefits high quality replica handbags china for the Company, its shareholders, employees best replica handbags , the communities surrounding cheap replica handbags the mine and the country of Botswana. In anticipation of a decision to proceed with construction of an underground mine at Karowe during 2020, the Board of Directors decided to re direct the Company’s available cash to the early works of the underground including detailed engineering, procurement initiatives and project financing. These activities will be funded from operating cash flow in 2020, under a Board approved budget of up to $53 million.
Diamonds are heterogeneous by nature, with thousands of different price points depending on weight, colour, shape, and quality. Diamond production from Karowe is characterised by a coarse diamond size frequency distribution and is positively impacted by the regular recovery of diamonds in excess of 10.8 carats in size, referred to as “Specials.” Karowe production is further distinguished by the consistent recovery of high value, gem quality Specials.
Specials are reported by total stone count and as a percentage of the total production. In 2019, a total of 786 stones were recovered representing 6.1 weight percent of total carats recovered from direct milling ore, consistent with the resource model for Karowe. Overall processing in 2019 had contributions from the North, Centre and both the EM/PK(S) and M/PK(S), distinct units within the South lobe. The proportion of carats from the lower value and less coarse North and Centre lobes was approximately 20%, the highest contribution since 2016.
In 2019, a total of 30 individual diamonds were sold for a value of > $1 million including 11 diamonds > $2 million of which 2 diamonds sold for > $5 million each. Sales of individual stones at prices between $2 million and $5 million were consistent with previous years. Achieved prices in 2019 for high value single diamonds were impacted by significant price erosion in high colour (D) 10 carat and 20 carat polished.
Certain stones from the Karowe production and other aggregated diamonds were offered for sale through the Clara platform during 2019. As 2020 progresses, a greater proportion of certain sales parcels from Karowe will move to the Clara platform, rather than being sold through the quarterly tender process.
The Company achieved revenues of $56.0 million or $568 per carat for its sales in the fourth quarter, yielding a strong operating margin of 63% during the period. During the fourth quarter of 2019, stabilization in rough pricing was observed across all size classes. The general improvement in pricing high quality designer replica handbags wholesale as compared to earlier in the year, combined with a higher value blend of ore to the process plant resulted in revenue for 1:1 replica handbags the quarter and for the year ending December 31, 2019 being achieved above expectations. The increase in average price per carat sold, along with a 10% decrease in operating expenses per carat sold, resulted in an operating margin of 63% in Q4 2019; this represents a significant improvement from the 36% operating margin achieved in Q4 2018.
Operating expenses decreased approximately 20% from $25.8 million in Q4 2018 to $20.6 million in Q4 2019, mostly due to a decrease in the average cost per tonne mined. Operating expenses in Q4 2018 included additional one time costs following the transition between mining contractors during the third aaa replica designer handbags quarter of 2018.
Adjusted EBITDA increased from $4.7 million in Q4 2018 to $22.8 million in Q4 2019. The significant quarter to quarter increase resulted from the combination of a $13.9 million increase in net revenue and a $5.2 million decrease in operating expenses (Non IFRS measure).
Adjusted EBITDA (Non IFRS measure) fake louis bag , earnings per share and the Company’s ending cash position were as expected and reflect the overall performance of the Company’s sales tenders.
QUARTERLY RESULTS OF OPERATIONS KAROWE MINE, BOTSWANA
FOURTH QUARTER OVERVIEW KAROWE MINE
Safety: Karowe had one lost time injury during the three months ended December 31 www.dolabuy.su , 2019 resulting in a twelve month rolling Lost Time Injuries Frequency Rate (“LTIFR”) of 0.78.
Production: Ore and waste mined during the fourth quarter of 2019 totaled 0.7 million tonnes and 0.7 million tonnes respectively. Tonnage processed was on target at 0.6 million tonnes, with a total of 86,422 carats recovered. Ore processed was predominantly from the South Lobe. During Q4, a total of 177 Specials (single diamonds larger than 10.8 carats) were recovered including seven diamonds greater than 100 carats in weight and two diamonds greater than 200 carats. Recovered Specials equated to 6.1% weight percentage of total recovered carats during the year, the third year to achieve greater than 6% weight percentage of total recovered carats, in line with expectations.
A record 2.8 million tonnes of ore were processed during 2019, at the top end of 2019 guidance of 2.5 to 2.8 million tonnes. A total of 3.3 million tonnes of ore was mined for the year, surpassing the original guidance of 2.5 2.8 million tonnes and meeting revised guidance of 3.0 3.4 million tonnes. Following the transition to a new mining contractor in mid 2018, productivity improved considerably and continued through 2019. Beginning in cheap louis vuitton bags from china uk the fourth quarter of 2018, Trollope Mining Services Pty (“Trollope”) was responsible for all waste and ore mining.
Karowe’s operating cash cost: Karowe’s full year 2019 operating cash cost (Non IFRS measure) was $31.88 per tonne processed (2018: $39.92 per tonne processed) compared to the full year forecast Fake Louis Vuitton Replica Bags of $32 37 per tonne processed. The decrease in cost per tonne processed compared to the prior year comparable periods reflects a 7% increase in total tonnes processed, a favourable exchange rate and cost optimization of the operations offsetting an increase in the cost per tonne mined following the transition to a new mining contractor in mid 2018.
Labour relations: In April 2019, the Botswana Mine Workers Union and Lucara Botswana entered into a Memorandum of Agreement which governs the working relationship between the two parties. In May 2019, the parties successfully negotiated and signed a Salaries and Conditions of Service Agreement which covers the terms and conditions of employment, including wages, to March 31, 2021. In Botswana, a majority of currently operating mines are unionized.
In 2018, the Company embarked on a technical program to support a feasibility level study for a potential underground operation at the Karowe Diamond Mine. This program included the completion of an updated mineral resource, geotechnical drilling of the country rock and AK06 kimberlite, hydrogeological drilling and modelling, and mining trade off studies to address risks and issues identified during the PEA.