Lucara Diamond sales beat expectations in fresh sign of market improvement

19.12.2019, 13:58 - eeppo

Canada’s Lucara Diamond (TSX:LUC) is the latest miner to inject some optimism into a depressed market that was hit this year by an unforeseen oversupply and increasing demand for lab-made gems by announcing better than expected sales in December.

The Vancouver-based company, which operates the prolific Karowe
mine in Botswana, fetched $52.9 million in the final tender held last week. The
figure represents an average price of $548 per carat — about 40% higher
than the company’s average price achieved in the previous quarter.

The proceeds also exceeded expectations by 16%, Lucara said,
which suggests the market for rough diamonds is finally turning a corner.

“Though it is too early to call a trend, prices
achieved in our final sale of the year reflect a stronger, more stabilized
market environment and continued strong demand for Karowe diamonds,” chief
executive, Eira Thomas, said in the statement.

Thomas noted that sales through Clara, its secure,
web-based, digital sales platform, continued to increase this year as it grew
its customer base well beyond expectations from 4 to 27 clients. 

Demand in recent online sales, Lucara noted, has now
outstripped available supply and the platform is ready to receive a larger
quantity of third-party goods to support its next phase of growth. Trials with
at least two other providers are anticipated to begin early next year, it said.

Lucara’s news comes on the heels of  Anglo American’s De Beers results for its last sale of the year, which also showed early signs of stabilization in the sector.

The world’s No.1 diamond miner by value sold $425 million
worth of diamonds this month, a slight improvement from the $400 million it
obtained in the previous tender, but still over the year a whopping $1.4
billion less than in 2018.