Lucara Diamond Corp. is pleased to announce that it has entered into a new diamond sales agreement (“NDSA”) with HB Group out of Antwerp, Belgium (“HB”), in respect of all qualifying diamonds produced in excess of 10.8 carats in size from its 100% owned Karowe Diamond Mine in Botswana.
Under the terms of the 10-year NDSA with HB, the purchase price paid for Lucara’s +10.8 carat rough diamonds shall be based on the mutual agreement of the estimated polished outcome, determined through state-of-the-art scanning and planning technology, together with external benchmarks and more than a decade of Lucara’s special stone sales data. A further sales value uplift (“top-up”) will be paid to Lucara based on actual achieved polished sales thereafter, less a fixed margin payable to HB. This pricing mechanism is expected to deliver regular cash flow for this important segment of the Company’s production profile at better than conventional diamond industry tender prices.
The anticipated benefits of the NDSA to Lucara include:
- Regular cashflow to Lucara in support of the ongoing development of the Karowe Underground Project.
- Significant potential revenue upside, especially for large complex rough diamonds, based on historical performance, providing a premium on diamond sales benefiting all Karowe Mine stakeholders.
- Ongoing alignment with the Government of Botswana’s strategy to diversify downstream, and participate in the upside of polished diamond revenue.
- Streamlined diamond evaluation, sales reporting and payment mechanisms.
- The creation of an efficient and restructured, large and high quality diamond supply chain which has the potential of meeting the demands of high-value brands
The NDSA is subject to the approval of the Company’s project lenders. Upon such approval the agreement terms will be effective retroactively from December 1, 2023. Since that time, Lucara has continued to supply qualifying rough diamonds to HB in order to fund its operations and the Karowe Underground Project.
William Lamb, President & CEO commented: “As we navigate through the ever-evolving landscape of the diamond industry, I’m pleased to announce Lucara’s strategic decision to re-enter into a long-term supply agreement with HB Antwerp. This partnership reflects our commitment to ensuring stability and sustainability in our operations. Our collaboration with HB Antwerp presents an opportunity to further enhance our position in the market, building on the knowledge of the past and the understanding of the quality of the polished diamonds produced from our Karowe diamonds. We remain steadfast in our dedication to delivering exceptional quality and premium value from our diamonds to all stakeholders, even amidst external pressures. Together, we will continue to uphold the legacy of excellence that defines Lucara’s journey in the world of diamonds”.
