Lucapa Diamond Company Limited (ASX:LOM) has announced the sale of its third parcel of diamonds. The parcel came from the Lulo Diamond Concession in Angola. The gross proceeds from the sale totalled A$790,000. The asset comprised of 1,450.16 carats and had an average sale price of A$544 (US$420) per carat. The sale was conducted by the Angola Government diamond marketing agency SODIAM in the Angola capital of Luanda. Contrary to the other two sales, the third sale did not have any large premium-value special diamonds. The third parcel sale included mining production up until January 2015.
An announcement last month saw the sale of the “large special” Lulo diamonds and achieved a sales price well above US$20,000 per carat. The remaining diamond production sales average was approximately US$400 per carat, which is more than double the global average sales price of around US$120 per carat. Lucapa plans to propose its fourth diamond sale to the Lulo Board in May 2015. In line with previous guidance, the company and its partners will hold sales more regularly. The purpose of the increased sales is to also increase ongoing cash flows while scaling up mining operations at Lulo. The fourth parcel of diamonds is expected to include the 63.05 carat Type IIa diamond recovered earlier this month. The “large exceptional” diamond has been acid washed and confirmed as a D-colour diamond by the Yehuda colorimeter.
Shares of the diamond company are flat near the end of trading on Wednesday, at 22c per share. Although LOM has advanced over 20 per cent in the last 12 months, it has fallen over 31 per cent so far this year.
Author: Simon Herrmann
Apr 22, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.