By submitting the report for the fourth quarter of 2021, Lucapa Diamond Company Ltd. (ASX: LOM, FSE: NHY) once again impressively that 2021 was an extremely successful year at all levels. Operationally and financially, record results were achieved and the exploration programs could be further advanced on all mines. In addition, there was the successful acquisition of the Merlin diamond project in Australia. This strategic acquisition will significantly increase the potential of the company in the coming years.
Records above records will be remembered in brief when Lucapa Diamond looks back on the past year today. It was particularly gratifying that not only a single subunit of the company shone, but extraordinary results were achieved in all areas.
The long list begins with the total production of 2,150 carats on the two African mines. A total turnover of 135 million Australian dollars (AUD) was generated from their sales. AUD 65 million Lucapa Diamond is directly attributable from him, resulting in revenues of AUD 1,780 per carat mined.
For the industry, this is already a dream result in normal years and against the background of the weak diamond prices of 2020, the joy of the very good sales results is of course much greater. For the company, this results in an unaudited EBITDA of AUD 21 to 23 million.
Lucapa Diamond achieves record results on both mines
With this result, Lucapa Diamand nevertheless falls slightly short of his expectations, because at the end of the fourth quarter there were higher costs that reduced earnings. Repairs were carried out in the Mothae mine on the foundations of the crusher plant and the improvements to the production plant were completed as planned, so that the mine has been working at full capacity again since December.
Previously uncalculated costs also arose on the Lulo mine. Here, the money invested went into additional alluvial and kimberlite exploration. In the short term, such costs will of course burden the result, but in the long term they will lead to higher returns, which makes the additional expenditure more than justifiable.
A look at their production results for 2021 shows how well the two African mines are currently in shape. New annual records were set last year at both the Mothae and Lulo mines. They concerned both the amount of rock processed, as well as the weight of the extracted diamonds and the prices achieved per carat.
Lucapa Diamand is therefore entering the new year 2022 not only with a strong balance sheet and high cash positions, but also with a new drive, because firstly, they want to build on from the good results from the previous year and secondly, things should now also get things right on the new Merlin project after the completion of the takeover.
As far as the Merlin project is concerned, it is clear to all parties involved: The faster this project can be advanced and the faster a new mine is also being built in Australia, the more dynamic the entire company will develop in the end, because Lucapa Diamand will finally have risen to a new level with a Merlin mine produced
Background
Lucapa Diamond Company Ltd. (ASX: LOM, FSE: NHY) is a listed mining company in Australia and Germany that specializes in the production of high-quality and thus also very high-priced diamonds. Lucapa Diamond therefore achieves the highest remuneration in alluvial diamond mining worldwide per carat. More than 75 percent of the revenue now comes from the sale of diamonds weighing more than 4.8 carats. Production takes place in the Mothae mine in Lesotho and since 2015 also in the Lulo mine in Angola. In addition, the Merlin project is being developed in Australia. As a Kimberlite mine, the Mothae mine is one of the very few deposits in this class worldwide and is already profitable. Since then, more than 23 diamonds weighing more than 100 carats have already been mined on the Lulo mine operated since 2015. In 2021, Lucapa benefited from the significantly recovered diamond prices and some particularly large stones promoted on the Lulo mine.
LOM Price at posting:
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