Wednesday, June 13, 2012

First diamonds from Karowe mine auctioned


Over P42m realised from 26,196 carats sold

Botswana Stock Exchange (BSE) listed diamond junior, Lucara Diamonds says it has completed the first sale of diamonds from its recently opened Karowe mine in the Boteti region. Karowe, formerly known as AK6 mine, was commissioned three months ago and targets to sell 300,000 carats in 2012. In a statement, Lucara, which has a primary listing on the Toronto Stock Exchange (TSX) said 26,196 carats of Karowe diamonds were sold through its new online auction system fetching over P42 million in revenue. "A total of 35 individual lots containing 29,339 carats of diamond were put up for sale through the on-line auction.
"Of the 35 lots, 30 were sold for a total revenue of $5.64 million at an average diamond value of $215 per carat.
Of the diamonds sold, the parcel included a 25.9ct stone which sold for $5,022 per carat," reads the statement.Lucara is the second company to hold independent diamond auctions in Gaborone outside the Diamond Trading Company (DTC) framework after another diamond junior, Firestone Diamonds kickstarted tenders in Gaborone in December 2010.
William Lamb, president and CEO, commented, "With the first sale of Karowe production, Lucara has achieved the final milestone in its transition to an operating company. It is a direct reflection of the current status of global markets that not all diamonds were sold during this first auction; however, we are extremely bullish about the market outlook overall and look forward to our future sales. Our new Karowe Mine produces high quality diamonds and we can expect to always see steady demand regardless of the cycle the market is in".
At the end of May 2012, greater than 33,500 carats of diamonds were recovered from 85,000 tonnes of ore processed at Karowe. The company says the recovered grade of 39 carats per hundred tonnes supports the resource grade estimate for the area of the pit being mined. The mine production plan for the remainder of 2012 includes ore from the North and Centre Lobes and will deliver an average ore grade of approximately 20 carats per hundred tonnes (cpht).
Following the unexpected closure of Firestone's BK11 mine recently, the Karowe mine formerly known as AK6, is the only operating mine outside of the Debswana stable. Later this year, government through its newly incorporated private company, the Okavango Diamond Trading Company, is expected to start its own independent diamond auctions.
Okavango Diamond Trading Company will this year purchase, market and sell 11 percent of Debswana production that the state is entitled to through the new marketing agreement signed with De Beers last year. The new company is expected to independently auction an estimated $300 million (P2, 2 billion to $350 million (P2, 6 billion) worth of diamonds on the open market per annum from Debswana's average $3 billion-a-year supply.

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