LOM (ASX) Quarterly Report

Originally posted by LifeBeinit: ↑

Quick Summary of the Quarterly:

for the period ending **31 December 2024 (Q4)**

structured summary of the key points:
---#### **1. Lulo Alluvial Mine (Angola):**- **Production:** - **8,012 carats** were recovered in Q4, a **5% increase** compared to Q4 2023. - Focused mining in higher-grade floodplain areas after completing the second river diversion. - Recovery of **special-sized diamonds (+10.8 carats)** increased by **43%** to 77 stones compared to Q4 2023.- **Sales:** - **8,016 carats** were sold in Q4 for **US$10 million**, at an average price of **US$1,251 per carat**. - Revenue dropped **80%** compared to Q4 2023 due to the absence of large, high-value diamonds sold in the previous year. - Most larger diamonds recovered in Q4 2024 were held in inventory for sale in Q1 2025.- **Challenges:** - Decline in rough diamond revenue and price per carat compared to the previous year. - Reduction in diamond inventories by **33%** and cash/receivables to **US$0**.
---#### **2. Lulo Kimberlite Exploration (Angola):**- Conducted by the **Project Lulo Joint Venture** (Lucapa 39%, Endiama 51%, Rosas & Petalas 10%).- Updates on the **Kimberlite Bulk Sampling Program** and **Mineral Investment Contract** were announced on 28 January 2025.
---#### **3. Merlin Diamond Project (Australia):**- **Exploration:** - The first modern **electromagnetic (EM) survey in 25 years** was conducted over the Merlin tenements. - Preliminary results identified **two large conductive targets** (potential base metals and kimberlites).- **Re-start Plan:** - A two-phase plan was announced to restart diamond production at Merlin: - **Phase 1:** Excavator dredging for 18 months, requiring **A$15 million** in funding. - **Phase 2:** Vertical Pit mining for 27 months, requiring **A$10 million** in funding. - The project has a forecast **pre-tax NPV (10%) of A$40 million** and a projected **pre-tax IRR of 75%**. - Discussions are ongoing to secure project-level funding.
---#### **4. Corporate Updates:**- **Management Changes:** - **Nick Selby** stepped down as MD & CEO, with **Alex Kidman** appointed as the new MD & CEO.- **Capital Raise:** - A placement and Share Purchase Plan (SPP) were launched to fund exploration at Merlin and bolster working capital.- **Future Outlook:** - The company anticipates further production improvements at Lulo in 2025 with ongoing river diversions. - Detailed results from the Merlin geophysics survey are expected later in Q1 2025.

---### My thoughtst:1. **Positive Developments:** - The increase in carat recovery and special-sized diamond recoveries at Lulo is a positive operational outcome. - The identification of large conductive targets at Merlin through modern geophysics is promising for future exploration and potential diversification into base metals.2. **Challenges:** - The significant drop in revenue and price per carat compared to Q4 2023 highlights the volatility of the diamond market and the reliance on high-value stones for profitability. - The depletion of cash and receivables to **US$0** is concerning and underscores the importance of the ongoing capital raise.3. **Strategic Focus:** - The re-start plan for Merlin demonstrates a clear strategy to diversify and expand production capabilities. However, the success of this plan hinges on securing the necessary funding. - The company’s focus on exploration and production improvements at both Lulo and Merlin indicates a long-term growth strategy.4. **Management Transition:** - The leadership change could bring fresh perspectives, but it also introduces potential uncertainties during a critical period of operational and financial challenges.

---### Conclusion:Lucapa Diamond Company is navigating a mixed quarter with operational improvements at Lulo, promising exploration results at Merlin, but significant financial and market challenges. The company’s ability to secure funding, execute its Merlin re-start plan, and capitalize on its exploration results will be critical to its success in 2025 and beyond.

LB

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Just as well you said it was a “quick summary”

Thanks mate..