LOM 0.00% 6.5¢ lucapa diamond company limited

4th diamond sale this friday to wednesday

  1. 10,467 Posts.
    lightbulb Created with Sketch. 2078
    The last diamond sale was on Wednesday the 22nd of April and this Friday is the 22nd.
    So IM expecting the diamond sale to be completed this Friday or if the norm is to conduct the diamond sales on a Wednesday it will be next week on the 27th.
    I view this sale as a important milestone for the mining operation as a sale figure of around 2 million will put the alluvial mining and kimberlite exploration program in cash flow positive.
    The company has said it will be selling a diamond batch each month,so monthly sale figures from this point are critical in keeping the registry in place and not ending up needing another cap raise.
    Over the last quarter about 4000 cubic meters a month was process in the wet season.
    This quarter being the dry season it would be closer to 6000 cubic meters a month and is expected to reach 10,000 cubic meters by June.
    For now IM sticking with 6000 cubic meters a month until the extra machinery has been ordered and delivered.
    The current higher grade areas being mined are expected to generate 15 carats per 100 cubic meters or over 18,000 cubic meters for a quarter the total would be 2,700 carats.
    To be cash flow positive mining 18,000 cubic meters a quarter at a grade of 15 carats per 100 cubic meters the mining operation would need to sell 2,700 carats at $1200 US a carat per quarter.
    I worked out this figure on mining extra purchases and other costs such as the kimberlite program totalling 3.3 million a quarter increasing a little once 30,000 cubic meters a quarter is being processed.

    The company is saying they will be cash flow positive once the process rate reaches 10,000 cubic meters a month(30,000 a quarter),but that would be based on a carat price of about $500 US a carat at a rate of 10 carats per 100 cubic meters(stated in the ML application),totaling 1.5 million dollars for the quarter.
    I have always assumed mining costs would be 500k a month up to 10,000 cubic meters a month,but the spend rate is far greater than that.
    I guess what all this means is the mining costs are currently about 500k a month and excess above this will be the positive cash flow that will pay for the kimberlite program and additional purchases.
    Once all extra purchases have occurred there would be a huge cash surplus per quarter if monthly sales are the expected 2 million a month that the company has previously stated can be achieved.
 
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