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- Lucapa Diamond Company (LOM) has signed an agreement with leading diamond manufacturing group, Safdico International
- Safdico is a subsidiary of Graff – one of the world’s finest high-end jewellery brands
- Under the agreement, Safdico can purchase up to 60 per cent of production from Lucapa’s Lulo mine
- In exchange, it will cut and polish diamonds from the mine
- Lucapa is up 8.33 per cent on the market this morning, trading at 13¢ per share
Lucapa Diamond Company (LOM) has signed an agreement with leading diamond manufacturing group, Safdico International.
The manufacturing group will cut and polish diamonds from Lucapa’s Lulo mine.
Safdico is a subsidiary of Graff International, which is one of the world’s finest high-end jewellery houses. The subsidiary supplies Graff stores with some of the most iconic and valuable polished diamonds.
Under the agreement, Safdico can purchase up to 60 per cent of Lulo’s annual alluvial rough production.
The diamonds purchased by Safdico are placed into the cutting and polishing partnership.
Once production costs are covered, the remaining profits that are generated beyond the mine gates will be equally shared between Sociedade Mineira Do Lulo (SML), a Lulo alluvial mining company, and Safdico.
Currently, Safdico has purchased approximately 4900 carats of mine rough diamonds from SML under this commercial partnership. SML is due its first share of the partnership profits from Safdico this quarter.
“This new Lulo revenue stream represents another key milestone for Lucapa’s value-adding strategy,” the company told the market.
Recently, SML completed a self-funded of nearly $18 million (US$12 million) capital investment program. The program is designed to expand total group production to more than 60,000 carats in 2020.
“This production increase, coupled with the new revenue streams generated from the cutting and polishing agreement with Safdico, will enable SML to generate higher returns for its partners and make more regular loan repayments to Lucapa,” it added.
Lucapa is up 8.33 per cent on the market this morning, trading at 13¢ per share at 12:14pm AEDT.
