Lucara Diamond to make capital investment in tough market
While the diamond market has had a rocky year, Lucara Diamond (TSE:LUC) will be spending money on capital investments.
The company announced yesterday that it approved $53 million for early works at Karowe Diamond Mine's underground works.
"Anticipated cash flow from operations in 2020 should allow us to pursue early works which are critical to the underground development schedule, while at the same time allowing us to leverage our balance sheet to finance the project in a cost-effective manner," said Eira Thomas, president and CEO, in news release.
The company said an investment decision will be made in the second half of 2020.
Looking ahead Lucara Diamond said revenue is forecast for 2019 between $180 million and $210 million. That would be up from the $176.2 million in revenue the company made in 2018.
Diamond recoveries are expected to be between 370,000 carats and 410,000 carats, and diamonds sold are expected to be between 350,000 carats and 390,000 carats.
Diamond producers have been laboring under low demand. Bloomberg reported earlier this month that De Beers had cut prices by 5% to stem an "industry crisis." Stornoway Diamond, which was under creditor protection, was bought by Osisko Gold Royalties in September.
Year-to-date Lucara is down 43% to 82 cents a share.