OREANDA-NEWS. November 10, 2015. Lucara Diamond Corp. ("Lucara" or the "Company") is pleased to report revenues of \\$90.9 million for the quarter with an operating margin of 88% and revenues of \\$158.6 million for the nine months to September 2015.

HIGHLIGHTS:

Financial:

·    EBITDA for the period was \\$66.8 million and year to date was \\$95.3 million.

·    Net cash position of \\$122.7 million increased from \\$74 million at June 2015 following the Company's first exceptional stone tender and regular tender during the quarter.

·    Year to date costs at \\$29.44 per tonne ore processed remain well controlled and marginally below forecast.  Plant optimization costs and sustaining capital costs are within forecast.

·    Third quarter earnings per share of \\$0.12 (2014: \\$0.11 per share).  Year to date earnings per share of \\$0.15 (2014: \\$0.17 per share).

·    Dividend: cumulative dividend of CND 4 cents per share to be paid to shareholders on Decembers 17, 2015

Operational:

·    Tonnes processed post plant optimization commissioning improved during the quarter.   Tonnes milled in the third quarter were 11% higher than the previous quarter with 100,651 carats recovered during the period. 

·    Fourth quarter processing is expected to be focused on south lobe ore.

Exploration:

·    Exploration sampling advancing with first ore to be processed from BK02 during the fourth quarter.

William Lamb, President and Chief Executive Officer commented "Karowe continued to deliver strong cash flows in Q3, underpinned by the sale of our large, high value diamonds and our disciplined approach to cost control and allocation of capital.  Further, demand for our diamonds remains high and we anticipate continued, robust free cash flow to help deliver strong shareholder returns going forward. We have been pleased with the optimized plant performance through the quarter with production returning to design capacity levels. This is particularly important as production in the fourth quarter will focus on south lobe material. The commissioning of the bulk sample plant has resulted in us advancing on our exploration activities. We look forward to updating the market on these exciting developments"

FINANCIAL UPDATE

Revenues and operating margin: The Company achieved revenues of \\$90.9 million or \\$1,081 per carat in the third quarter of 2015.  The Company's third quarter operating margin was \\$951 per carat or 88%, which is largely due to the Company's first exceptional stone tender in 2015, which achieved proceeds of \\$68.7 million from the sale of 1,674 carats.

Year to date revenue to September 30, 2015 was \\$158.6 million or \\$560 per carat achieving a 77% operating margin.

Net cash position: The Company's third quarter cash ending balance was \\$122.7 million compared to \\$74 million at the end of June 2015.   The increase in cash is due to the Company's exceptional stone tender and regular tender during the quarter, which generated proceeds of \\$89.2 million.  Revenue from sales were partially offset by operating costs and royalty payments, a quarterly tax payment of \\$6.2 million and capital expenditures of \\$7.8 million during the period. 

Earnings per share:  Earnings per share was \\$0.12 for the three month period ended September 30, 2015 and \\$0.15 for the nine month period ended September 30, 2015 (\\$0.11 and \\$0.17 earnings per share for the three and nine months to September 30, 2014 respectively). 

Dividend Paid: The Company has declared a year-end dividend of CDN 2 cents per share for a cumulative dividend of CDN 4 cents per share in 2015.  The dividend is expected to be paid on December 17, 2015 to holders of securities on the record of the Company's common shares at the close of business on December 4, 2015 and represents a yield of 2.4% based on the share price of November 4th.

FINANCIAL HIGHLIGHTS


Three months ended
September 30

 

Nine months ended
September 30

In millions of U.S. dollars unless otherwise noted

2015

2014

 

2015

2014

 

 

 

 

 

 

Revenues (*)

\\$               90.9

\\$               91.3

 

\\$            158.6

\\$           195.0

 

 

 

 

 

 

   Average price per carat sold (\\$/carat)

1,081

791

 

560

634

   Operating expenses per carat sold (\\$/carat)

130

122

 

131

123

   Operating margin per carat sold (\\$/carat)

951

669

 

429

511

 

 

 

 

 

 

Net income for the period

44.2

41.8

 

58.8

62.5

Earnings per share (basic and diluted)

0.12

0.11

 

0.15

0.17

Cash on hand

122.7

133.1

 

122.7

133.1

 (*) Revenue is presented based on cash receipts received during the period and excludes tender proceeds received after each quarter end.  See results of operations (page 3) for reconciliation of revenue and total proceeds for tenders received for each quarter.  

RESULTS OF OPERATIONS

Karowe Mine, Botswana

 

UNIT

YTD-15

Q3-15

Q2-15

Q1-15

Q4-14

Q3-14

Sales

 

 

 

 

 

 

 

Revenues

US\\$m

158.6

90.9

38.1

29.7

70.5

91.2

Proceeds generated from sales tenders conducted in the quarter are comprised of:

US\\$m

158.6

89.2

39.7

29.7

70.5

66.5

   Sales proceeds received during the quarter

US\\$m

158.6

90.9

38.1

29.7

70.5

91.2

   Q2 2015 tender proceeds received post Q2 2015

US\\$m

-

(1.6)

1.6

-

-

-

   Q2 2014 tender proceeds received post Q2 2014

US\\$m

-

-

-

-

-

(24.8)

Carats sold for proceeds generated during the period

Carats

283,110

76,156

100,177

106,777

104,405

88,364

Carats sold for revenues recognized during the period

Carats

283,110

83,960

92,373

106,777

104,405

115,362

Average price per carat for proceeds generated during the period (**)

US\\$

560

1,171

396

278

675

753

Average price per carat for proceeds received during the period (***)

US\\$

560

1,081

412

278

675

791

 

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

 

Tonnes mined (ore)

Tonnes

2,148,322

864,180

722,855

561,287

757,672

1,003,312

Tonnes mined (waste)

Tonnes

10,746,948

3,224,971

4,278,605

3,243,372

2,477,687

2,624,067

Tonnes treated

Tonnes

1,671,008

560,501

506,538

603,969

566,681

509,283

Average grade processed

cpht (*)

16.50

18.0

16.9

14.9

20.1

20.8

Carats recovered

Carats

276,443

100,651

85,714

90,077

113,950

106,162

 

Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs per carats sold (see page 7 Non-IRFS measures)

US\\$

131

130

160

108

89

122

Capital expenditures (including capitalized waste)

 

 

 

 

 

 

 

   Plant Optimization

US\\$m

14.5

2.9

2.2

9.4

16.6

12.8

   Sustaining capital

US\\$m

4.4

1.2

2.1

1.1

2.3

1.0

   Bulk Sample Plant

US\\$m

1.8

1.4

0.2

0.2

2.0

-

   Capitalized waste

US\\$m

11.6

2.3

4.2

5.1

1.8

0.4

Total

US\\$m

32.3

7.8

8.7

15.8

22.7

14.2

(*) carats per hundred tonnes.

(**) Average price per carat for proceeds generated during the period includes all sales tendered during the period including proceeds received post the quarter end.

(***) Average price per carat for proceeds received during the period includes all sales proceeds collected during the period including proceeds received during the quarter from previous period sales tenders.