Lucara Diamond Group (LUC) Q3 2024 earnings summary

Executive summary

• Q3 2024 marked by recovery of two exceptional diamonds over 1,000 carats, including a 2,488-carat and a 1,094-carat stone, reinforcing Lucara's leadership in large stone recovery.

• Sold 116,221 carats generating $44.3 million in revenue; completed sale of Clara platform, eliminating significant share issuance obligations.

• Significant progress in Karowe Underground Project (UGP) shaft sinking, with production and ventilation shafts ahead of schedule.

• Karowe Mine maintained over three years without a lost time injury, highlighting strong safety performance.

Financial highlights

• Q3 2024 revenue was $44.3 million, down from $56.3 million in Q3 2023; net income from continuing operations was $0.2 million, compared to $11.7 million last year.

• Operating margin for Q3 2024 was 48%, down from 63% in Q3 2023, due to lower realized revenue.

• Operating cost per tonne processed decreased 5% year-over-year to $27.34.

• Cash and cash equivalents stood at $23.6 million, with working capital of $22.3 million as of September 30, 2024.

• $180 million drawn on the $190 million Project Facility for UGP; $25 million drawn on the $30 million working capital facility.

Outlook and guidance

• 2024 full-year revenue guidance revised down to $160–$180 million due to lower production of HB qualifying Specials and softening diamond market.

• Karowe UGP capital costs for 2024 revised down to $80 million from $100 million, with deferred shaft equipping costs to 2025.

• Open pit mining to continue until mid-2025, with stockpiled material providing mill feed until 2027; underground production to commence H1 2028.

• Sustaining capital expenditures for 2024 expected up to $10 million, focused on asset replacement and tailings facility expansion.