|By Marketwired .||
|February 20, 2014 05:30 PM EST||
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 02/20/14 -- Lucara Diamond Corp. (TSX:LUC)(BOTSWANA:LUC)(NASDAQ OMX First North:LUC) ("Lucara" or the "Company") today reported full year revenue of $180.5 million from diamond sales that achieved an average price of $411 per carat at operating expenses of $100 per carat.
Safety: There were no Lost Time Injury ("LTI's") and no reportable environmental incidents at Karowe during the fourth quarter of 2013. Karowe's full year Lost Time Injuries Frequency Rate ("LTIFR") was 0.17. LTIFR is defined as the total number of work hours lost per 200,000 work hours.
Cash flows, cash operating margins and year end diamond inventory: The Company achieved revenue of $47.9 million ($433 per carat) from sales of 110,635 carats of diamond during the fourth quarter of 2013 including one exceptional stone tender. This excludes revenue of $10.9 million, which was received during the quarter from Karowe's late September tender. At an average operating expense of $109 per carat, the cash operating margin during the quarter was $324 per carat.
Full year sales of 438,717 carats achieved proceeds of $180.5 million, or $411 per carat. The Company achieved a full year cash operating margin of $311 per carat based on operating expenses of $100 per carat. Full year operating cost per tonne milled was $18 compared to budget of $23 per tonne.
At year end the Company was well positioned for 2014 with a significant diamond inventory of approximately 67,000 carats of diamond, including a selection of exceptional stones totalling over 1,000 carats. The Company expects to hold its first Exceptional Stone Tender of 2014, early in the second quarter.
Exceptional stone tenders: The Company continued to recover large and exceptional diamonds, resulting in an exceptional stone tender during the quarter achieving revenue of $22.9 million ($20,280 per carat). During 2013 the Company held three exceptional stone tenders achieving revenues of $72.1 million (2,971 carats at $24,290 per carat).
Net cash position: The Company continued to achieve strong cash operating earnings of $39.0 million during the quarter and $118.6 million for the year resulting in a year-end cash balance of $49.4 million. Management expects to use the existing cash resources to finance Karowe's plant upgrade capital expenditure during 2014. At year-end the Company remains debt free with the $25 million Scotiabank credit facility being undrawn.
Karowe operating performance: Karowe exceeded budget in terms of carats recovered and sold and surpassed its initial and updated revenue forecast of $90 million and $118 million respectively, largely due to the recovery and sale of large and exceptional diamonds (see above). Karowe earnings before deducting interest, income taxes, depreciation and amortization ("EBITDA") was $113.3 million, an EBITDA margin of 63%.
William Lamb, President and Chief Executive Officer commented: "Our first full year of production has surpassed expectations on all fronts having achieved total revenues in excess of $180 million and met production and safety targets at significant cost savings. Lucara exceeded its initial revenue guidance of $90 million by approximately $20 million, not including sales received from its exceptional stone tenders, achieving robust margins and demonstrating that the Karowe diamonds have been well received in the marketplace. Additional revenues of approximately $72 million, generated from the sale of our large and exceptional stones has further, significantly strengthened our balance sheet.
"In 2014, Lucara will continue to focus on operational excellence, cost discipline, and the completion of its' plant optimization project, which is designed to enhance the recoverability of large diamonds from Karowe. The Company is now debt free, with a solid balance sheet and is well positioned to achieve its operational objectives going forward. We believe that 2014 will be another exciting year for Lucara and its shareholders."
Three months ended Year Ended December 31 December 31 In millions of U.S. dollars unless otherwise noted 2013 2012 2013 2012 ---------------------------------------------------------------------------- Revenues $ 58.7 $ 29.1 $ 180.5 $ 41.8 Proceeds from quarterly sales tenders is comprised of: Sales proceeds received during the period 47.8 29.1 180.5 41.8 September tender proceeds received in October 10.9 - - - ------------------------------------ Total proceeds from quarterly sales tenders 58.7 29.1 180.5 41.8 Average price per carat sold (excluding September tender proceeds received in October) 433 289 411 $274 Operating expenses per carat sold 109 84 100 92 Cash operating margin per carat 324 205 311 182 EBITDA (1) 32.8 12.9 102.9 (0.2) Net income (loss) for the period 21.4 (4.1) 65.2 (7.5) Basic earnings (loss) per share 0.05 (0.01) 0.17 (0.02) Cash flow from operations (before working capital adjustments) 33.9 3.8 99.6 (3.8) Cash on hand 49.4 13.3 49.4 11.1 ---------------------------------------------------------------------------- (1) EBITDA is a non-IFRS measure defined as earnings before interest, taxation, depreciation and amortization. ----------------------------------------------------------------------------
RESULTS OF OPERATIONS
Karowe Mine, Botswana
---------------------------------------------------------------------------- UNIT Q4-13 Q3-13 Q2-13 Q1-13 Q4-12 Sales Revenues US$m 58.7 42.1 47.2 32.5 29.1 Proceeds generated from sales tenders conducted in the quarter are comprised of: US$m 47.8 50.9 49.3 32.5 29.1 Sales proceeds received during the quarter US$m 58.7 42.1 47.2 32.5 29.1 September tender proceeds received in October US$m (10.9) 10.9 - - - Sales proceeds received post June period end US$m - (2.1) 2.1 - - Carats sold for proceeds generated during the period Carats 110,635 80,918 102,452 144,712 100,987 Carats sold for revenues recognized during the period Carats 127,804 76,582 89,619 144,712 100,987 Average price per carat for proceeds generated during the period US$ 433 625 481 225 289 Production Tonnes mined (ore) Tonnes 918,765 898,501 1,157,747 969,330 701,931 Tonnes mined (waste) Tonnes 1,694,134 1,430,105 1,259,479 1,109,727 1,267,343 Tonnes milled Tonnes 613,064 647,304 560,910 533,260 545,354 Average grade processed cpht(i) 18.9 17.6 15.6 23.1 25.4 Carats recovered Carats 116,061 113,882 87,580 123,228 138,487 Costs Operating costs per carats sold (see page 5 Non-IRFS measures) US$ 109 110 102 86 84 Capital expenditures US$m 1.5 2.4 1.7 2.2 0.4 (i) carats per hundred tonnes ----------------------------------------------------------------------------
Operational performance at Karowe was as per forecast for the last quarter of 2013. Tonnes of ore mined were on target, and overall waste stripping was well advanced to access the deeper sections of the ore body in the south lobe as per the life of mine plan. The mine currently has three months of ore exposed providing flexibility of material processed. The process plant performed well during the quarter, and tonnes processed and carats produced were in line with forecast.
The first full year of operations at Karowe was extremely successful with production and cost targets either being met or exceeded. The 2013 year end target of 440,000 carats recovered was surpassed.
The frequency of special stones (+10.8 carats) recovered during the quarter was significant with 190 stones recovered with an average size of over 26 carats. This included five stones of over 100 carats and a single 281 carat stone. The recovery of specials during 2013 far exceeded expectations with 732 specials recovered with a total weight of over 18,000 carats equating to 4% of annual production. Included in this were 17 stones over 100 carats and 4 stones over 200 carats.
The geological resource update was completed during the quarter, which demonstrated superior value through the recognition of a continued presence of exceptional stones within the centre and south lobes. This is now reflected in the size frequency distributions and an increase in average modeled price to $394 per carat for an indicated mineral resource of 46.2 million tonnes with an average grade of 16 carats per hundred tonnes. The NI43-101 technical report accompanying the resource update was published on February 3, 2014 and can be found at www.sedar.com.
REVIEW OF PROJECTS
Mothae Diamond Project, Lesotho
The Mothae project is located in northeast Lesotho and is a large low grade kimberlite containing a population of large, high value Type IIa diamonds.
The Company is currently reviewing a number of development options for Mothae.
Karowe, Plant Optimization Project, Botswana
Karowe's plant optimization project to modify the process plant to treat the harder material at depth and improve the recovery of exceptional diamonds is advancing. Orders have been completed for some long lead items, and the project schedule is on track to be complete by year end.
This section with management's production and cost estimates for 2014 should be read as "forward-looking statements" and subject to the cautionary notes in the MD&A regarding the risks associated with forward-looking statements.
Karowe Mine, Botswana
Karowe is forecast to process 2.2-2.4 million tonnes of ore and to produce and sell 400,000 to 420,000 carats of diamond in 2014. Revenue is forecast between $150 - $160 million.
Ore mined is forecast between 3.0 - 3.5 million tonnes and waste mined is expected to be between 10.0 - 11.0 million tonnes.
Karowe's operating cash costs are expected to be between $31-$33 per tonne ore treated.
Capital expenditures include between $45-$50 million for Karowe's plant upgrade to improve large diamond recovery following the occurrence of exceptional stones, and to enable sustainable processing of hard ore in the south lobe. Sustaining capital expenditures is forecast at $3.5 million.
The Company plans on holding eight diamond tenders and two exceptional stone tenders during the year. The timing of these tenders will be based on Karowe's production profile as well as commercial decisions to maximize diamond revenue.
Karowe's detailed operating performance and capital spend guidance is available on SEDAR at www.sedar.com.
Legal proceedings were initiated against African Diamonds Plc, Lucara's wholly-owned subsidiary, by two former directors of African Diamonds claiming entitlement to a 3% royalty on production from the AK6 (Karowe) diamond project.
The claim was heard in the Botswana High Court in early June 2011. The High Court delivered its ruling, dismissing the claims against African Diamonds, with costs awarded against the plaintiffs. The plaintiffs appealed the ruling. The Appeal was heard in Botswana by a panel of international judges on Jan 21, 2014 with the judgment being handed down on February 6, 2014.
The Court of Appeals, the highest court in Botswana upheld the previous ruling by the Botswana High Court, dismissing the claim against African Diamonds, with costs awarded against the plaintiffs. The decision is final and there is no further recourse against African Diamonds.
Sale of Mothae plant
In December 2013, the Company signed a memorandum of understanding ("MOU") with Paragon Diamonds Ltd. ("Paragon") for the sale of certain kimberlite processing plant and diamond recovery assets. Under the terms of the MOU, the Company will receive consideration of:
-- $0.1 million cash and 4,434,589 common shares of Paragon on signing of the asset purchase agreement -- $0.2 million cash and 5,543,236 common shares of Paragon on commencement of relocation of the assets from the Mothae site. The number of common shares will be adjusted should an equity raise be completed by Paragon at a price less than GBP 0.04.
The signing of the asset purchase agreement is anticipated by the end of February 2014.
As part of the MOU, the Company received a non-refundable deposit of US$50,000 from Paragon in December 2013.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain of the statements made and contained herein in the MD&A and elsewhere constitute forward-looking statements as defined in applicable securities laws. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible" and similar expressions, or statements that events, conditions or results "will", "may", "could" or "should" occur or achieved.
Forward looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. The Company believes that expectations reflected in this forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information included in this MD&A should not be unduly relied upon. In particular, this MD&A may contain forward looking information pertaining to the following: the estimates of the Company's mineral reserve and resources; estimates of the Company's production and sales volumes for the Karowe Mine; estimated costs to construct the Karowe Mine, start-up, exploration and development plans and objectives, production costs, exploration and development expenditures and reclamation costs; expectation of diamond price and changes to foreign currency exchange rate; expectations regarding the need to raise capital; possible impacts of disputes or litigation and other risks and uncertainties describe under Risks and Uncertainties disclosed in the Company's Annual Information Form.
There can be no assurance that such statements will prove to be accurate, as the Company's results and future events could differ materially from those anticipated in this forward-looking information as a result of those factors discussed in or referred to under the heading "Risk Factors' in the Company's Annual Information Form dated March 27, 2013 available at http://www.sedar.com, as well as changes in general business and economic conditions, changes in interest and foreign currency rates, the supply and demand for, deliveries of and the level and volatility of prices of rough diamonds, costs of power and diesel, acts of foreign governments and the outcome of legal proceedings, inaccurate geological and recoverability assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalations, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job actions, adverse weather conditions, and unanticipated events relating to health safety and environmental matters)
Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date the statements were made, and the Company does not assume any obligations to update or revise them to reflect new events or circumstances, except as required by law.
On Behalf of the Board,
William Lamb, President and CEO
Lucara's Certified Advisor on NASDAQ OMX First North is Pareto Securities AB.
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
May. 2, 2016 01:45 AM EDT Reads: 1,239
The IoT has the potential to create a renaissance of manufacturing in the US and elsewhere. In his session at 18th Cloud Expo, Florent Solt, CTO and chief architect of Netvibes, will discuss how the expected exponential increase in the amount of data that will be processed, transported, stored, and accessed means there will be a huge demand for smart technologies to deliver it. Florent Solt is the CTO and chief architect of Netvibes. Prior to joining Netvibes in 2007, he co-founded Rift Technol...
May. 1, 2016 11:00 PM EDT Reads: 1,586
If there is anything we have learned by now, is that every business paves their own unique path for releasing software- every pipeline, implementation and practices are a bit different, and DevOps comes in all shapes and sizes. Software delivery practices are often comprised of set of several complementing (or even competing) methodologies – such as leveraging Agile, DevOps and even a mix of ITIL, to create the combination that’s most suitable for your organization and that maximize your busines...
May. 1, 2016 08:00 PM EDT Reads: 1,844
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
May. 1, 2016 07:00 PM EDT Reads: 744
See storage differently! Storage performance problems have only gotten worse and harder to solve as applications have become largely virtualized and moved to a cloud-based infrastructure. Storage performance in a virtualized environment is not just about IOPS, it is about how well that potential performance is guaranteed to individual VMs for these apps as the number of VMs keep going up real time. In his session at 18th Cloud Expo, Dhiraj Sehgal, in product and marketing at Tintri, will discu...
May. 1, 2016 06:00 PM EDT Reads: 810
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
May. 1, 2016 06:00 PM EDT Reads: 1,150
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
May. 1, 2016 05:00 PM EDT Reads: 1,019
Up until last year, enterprises that were looking into cloud services usually undertook a long-term pilot with one of the large cloud providers, running test and dev workloads in the cloud. With cloud’s transition to mainstream adoption in 2015, and with enterprises migrating more and more workloads into the cloud and in between public and private environments, the single-provider approach must be revisited. In his session at 18th Cloud Expo, Yoav Mor, multi-cloud solution evangelist at Cloudy...
May. 1, 2016 04:30 PM EDT Reads: 1,476
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
May. 1, 2016 04:00 PM EDT Reads: 935
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
May. 1, 2016 03:15 PM EDT Reads: 1,034
SYS-CON Events announced today that Stratoscale, the software company developing the next generation data center operating system, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution. With Stratoscale’s hardware-agnostic, Software Defined Data Center (SDDC) solution to store everything, run anything and scale everywhere...
May. 1, 2016 01:30 PM EDT Reads: 1,572
Digital payments using wearable devices such as smart watches, fitness trackers, and payment wristbands are an increasing area of focus for industry participants, and consumer acceptance from early trials and deployments has encouraged some of the biggest names in technology and banking to continue their push to drive growth in this nascent market. Wearable payment systems may utilize near field communication (NFC), radio frequency identification (RFID), or quick response (QR) codes and barcodes...
May. 1, 2016 01:30 PM EDT Reads: 816
Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified – now it's a component-based well-performing framework. This immersive one-day workshop at 18th Cloud Expo, led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and the product company SuranceBay, will provide you with everything you wanted to know about Angular 2.
May. 1, 2016 01:00 PM EDT Reads: 1,750
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
May. 1, 2016 12:45 PM EDT Reads: 823