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- Lucapa Diamond Company (LOM) upgrades its full-year attributable guidance
- The upgrade boosts the company’s EBITDA for 2021 by around 45 per cent to up to $28 million, following the strong performance of its Lulo and Mothae mines
- LOM expects annual diamond revenues for the period of up to $71 million — an increase on up to $56 million projected earlier this year
- However Lucapa has reported a drop in attributable diamond production for the year, down to a maximum of 37,200 carats compared to 42,600 carats as advised in May
- Shares are up 7.27 per cent to 5.9 cents each at 11:49 am AEDT
Lucapa Diamond Company (LOM) has upgraded its full-year attributable guidance for the 2021 calendar year.
The upgrade is set to boost the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the period by around 45 per cent to up to $28 million.
LOM attributed the increase to its solid operational performance at the Lulo and Mothae mines, in light of expansion ramp up, prevailing market demand and notable pink diamond recoveries.
Following the update, the company forecast an increase in annual diamond revenues, which would take the annual figure up to $71 million, compared to up to $56 million as projected earlier in the year.
On the other hand, Lucapa reported a drop in attributable diamond production — down to a maximum of 37, 200 carats compared to up to 42,600 carats as advised in May.
The reduction in guidance is primarily due to a revision in the Lulo mining plan, the decision to source a higher proportion of gravels from lower-grade, higher-value Lulo mining blocks and delays to expansion ramp-up at Mothae.
The company’s managing director Stephen Wetherall commented on the update.
“Lucapa and our partners set ambitious 2021 operational and financial targets for both mining operations as the diamond industry began to emerge from the pandemic,” he said.
“With nine months now behind us, we are extremely pleased to provide revised full-year guidance that sees an uplift of approximately 45 per cent in our EBITDA guidance to $26 million to $28 million.”
Mr Wetherall said Lucapa’s projected record financial performance was expected to accelerate returns to Lulo shareholders and capital loan repayments to the company, which LOM would likely use to reduce its corporate debt.
Looking ahead
Meanwhile Lucapa has estimated an exploration and development spend of up to $10 million for completed and upcoming activities focused on the Merlin and Lulo projects.
The company’s growth capital spend of up to $9 million will go towards an infield screening plant at the Lulo alluvial mine, as well as a 45 per cent expansion of the Mothae plant’s processing capacity to 1.6 million tonnes per annum.
Shares were up 7.27 per cent to 5.9 cents each at 11:49 am AEDT.
