Click the icon below to join our text alerts and receive our reports in real time, its quick, easy and free.
Lucara Diamond Corp (OTCMKTS: LUCRF), a diamond mining company, engages in the acquisition, exploration, development, and operation of diamond properties in Africa. Its principal property is 100% owned Karowe mine that is located in Botswana.
On March 2, 2018, Lucara Diamond Corp. announced that it has closed its acquisition of Clara Diamond Solutions Corp. (“Clara“). The Acquisition remains subject to final approval by the Toronto Stock Exchange. As up-front consideration for the acquisition, Lucara issued 13.1 million shares to the former shareholders of Clara. Further staged equity payments totaling 13.4 million shares become payable upon the achievement of performance milestones related to total revenues (revenues from rough diamonds bought and sold) generated through the platform. Lucara has also agreed to a profit sharing mechanism whereby the founders and facilitators of the Clara technology, and management of Clara, will retain 13.33% and 6.67%, respectively, of the annual EBITDA generated by the platform, to a maximum of US$25 million per year, for 10 years.
Clara Diamond Solutions Corp., uses cloud and blockchain technologies to modernize the existing diamond supply chain, driving efficiencies and ensuring diamond provenance from mine to finger.
Lucara Diamond Corp reached a new 52-week low during mid-day trading on March 2nd, Friday. The stock traded as low as C$2.11. Lucara Diamond (LUC) reached the new 1-Year Low at $2.11
On Feb. 25, 2018, William Lamb retired as Lucara’s Chief Executive Officer and stepping down from the Board of Directors. Eira Thomas, a founder and director of the Company will be assuming the role of CEO. In addition, Catherine McLeod Seltzer, also a Lucara Co-Founder, will be joining the Board of Directors. Under Mr. Lamb’s leadership, the Company’s flagship Karowe mine has evolved into one of the world’s highest margin diamond mines and the foremost producer of large, Type IIA diamonds in excess of 10.8 carats, including the historic 1,109 carat Lesedi La Rona (second largest gem diamond ever recovered) and the 813 carat Constellation (sold for a record US$63.1 million).
On Feb. 20, 2018, Lucara Diamond Corp. declared its first 2018 quarterly dividend of CDN 2.5 cents per share to be payable on April 12, 2018 to the shareholders of record at the close of business on March 23, 2018.
About the company:
Lucara is a leading independent producer of large exceptional quality Type IIa diamonds from its 100% owned Karowe Mine in Botswana. The Company has an experienced board and management team with diamond development and operations expertise. The company was formerly known as Bannockburn Resources Limited and changed its name to Lucara Diamond Corp. in August 2007. Lucara Diamond Corp. was incorporated in 1981 and is headquartered in Vancouver, Canada.
The Company’s principal property is 100% owned Karowe mine that is located in Botswana. The Company is a diamond mining company focused in Africa. The Company’s business consists of the acquisition, exploration, development and operation of diamond properties. The Company’s head office is in Vancouver, BC, Canada and its common shares trade on the Toronto Stock Exchange, the Nasdaq Stockholm Exchange in Sweden and the Botswana Stock Exchange under the symbol “LUC”. The principal assets of the Company and the focus of the Company’s operations, development and exploration activities reside in Botswana.
During Q4 2017 the Company successfully transitioned to a new processing contractor at the Karowe mine. The transition has increased capabilities on the operation of Karowe’s new circuits.
Mineral Resources
The diamond revenue model is substantially improved and is based on actual production sales figures from 2012 and 2013. The key reason behind the improved revenue model is that the occurrence of very large diamonds suspected from the earlier work, have been confirmed during mining, and the value of these stones can now be included in the Mineral Resource estimate for the mine.
Mineral Reserves
A trade-off study on the capital cost, plant efficiencies and size-revenue curve, indicated that the optimum bottom size cut-off for the project is 1.25 mm, and this is currently the bottom screen size cut-off in the Karowe plant. Mineral Reserves were estimated for the AK6 pipe, and active stockpile materials. There are no specific grade control programs. Generally, all kimberlitic material within the optimal pit is considered to be economic and will either be processed directly or stockpiled for possible future processing.
Market
Market is cautious – supply and demand fundamentals remain unbalanced. Retail sales in China appear to be improving, specifically in the smaller goods. The historical long‐term price trend is positive; short‐term prices are stabilizing.
Annual rough‐diamond production has been stable since 2010 at approx. 130 million carats (70% gem quality)
Source: LUCRF Website
Analysts Rating and Target price
Among 3 analysts covering Lucara Diamond 2 have Buy rating, 0 Sell and 1 Hold.
– downgraded by BMO Capital Markets to “Market Perform” on, February 25.
– Scotia Capital maintained the “Sector Perform” On Friday, February 17.
– Royal Bank of Canada upgraded Lucara Diamond from a “sector perform” rating to an “outperform” rating and raised their price objective from C$2.70 to C$3.00 on November 8th, 2017.
Q4 and FYE 2017 Financial position:
- Revenues and operating margins: The Company achieved revenues of $220.8 million during the year (2016: $295.5 million) including the sale of the 1,109 carat Lesedi La Rona (“LLR”) for $53.0 million ($47,777 per carat). The 2017 average price was $847 per carat (including the sale of the LLR) compared to 2016 average sales price of $824 per carat (including the sale of 813 carat Constellation diamond for $63.1 million). Excluding the sale of the LLR the average sales price for 2017 was $647 per carat which was in line with the 2016 average sales price of $649 excluding the sale of the 813 carat Constellation diamond.
- Net income: Full year net income was $65.1 million (2016: $70.7 million). The $5.6 million decrease is primarily due to lower sales and higher waste stripping costs incurred in 2017.
- Karowe’s operating cash cost: Karowe’s total annual operating cash cost was $34.6 per ton processed (2016: $26.5 per ton processed) compared to forecast of $36-$30 per ton processed.
- Net Cash Position: The Company’s 2017 year-end cash balance was $61.1 million (2016: $53.3 million). The increase in cash during the year is primarily due to the sale of the LLR which was partially offset by the Company’s capital expenditures of $34.2 million for the Mega Diamond Recovery (‘MDR’) and Sub-middles XRT capital projects, stripping costs of $32.9 million of which $24.8 million was capitalized and dividend payments of $29.4 million. The Company’s $50 million credit facility remains undrawn.
- Earnings and Basic Earnings Per Share: Earnings for 2017 were $65.1 million (2016: $70.7 million) and basic earnings per share were $0.17 for the year ended December 31, 2017 (2016: $0.19).
- Dividends: The Company paid its quarterly dividend of CA$0.025 per share on December 14, 2017 for a cumulative dividend of CA$0.10 per share in 2017 or a total of $29.4 million cash dividend to our shareholders.
Stock Influences and Risk Factors:
- The Company’s expenditures remain well controlled with mining and processing cost per ton and all site costs within forecast.
- The average diamond prices have decreased by up to 10% in certain size and quality fractions in 2017. But the quality Karowe’s south lobe diamonds was well accepted in a market.
- The Company is planning on completing drill programs at AK13, AK24 and LDD programs would be based on positive microdiamond results from the core drilling and geophysical surveys in the vicinity of AK11 and AK24.
- The operations of the Company are speculative due to the high-risk nature of its business which includes acquisition, financing, exploration, development and operation of diamond properties.
Stock Chart:
Comments:
- The company has market cap of $650 million.
- The USD/Pula budgeted foreign exchange rate for 2018 is 9.8.
- Total dividend of US$195.5 Million (CDN$250 Million), paid since commencement of the Company’s dividend policy in 2014, is greater than the equity capital raised since inception
Welcome to Traders News Source,
Our track record speaks for itself…
Small Cap Stocks could and should be the next to RUN in 2018 !
***Get our small cap profiles, special situation and watch alerts in real time. We are now offering our VIP – SMS/text alert service for free, simply text the word “Traders” to the phone number “25827” from your cell phone***
Traders News Source recent profiles and track record, 487% in verifiable potential gains for our members on 3 well timed small cap alerts alone! These are just three examples from over two dozen recent winners.
January 31st, 2017 (NASDAQ: HIMX) opened at $5.10/share and hit a high of $9.68/share March 24th, 2017 for gains of 89% within 60 days- http://finance.yahoo.com/news/himax-technologies-review-4q-2016-130000319.html
May 23rd, 2016- (NYSE: XXII) opened at $.87/share hit a high of $3.03/share so far our member potential gains- 248% – http://mailchi.mp/tradersnewssource/updates-5-of-our-profiles-for-212-400-and-whats-coming-next?e=[UNIQID]
October 31st, 2017 (NASDAQ: PYDS) Although we have been covering this security for over a year, our recent coverage October 31st, 2017 opened at $1.45/share hit $4.10 within three days for gains of over 150%- http://mailchi.mp/tradersnewssource/update-pyds-back-in-the-value-zone-with-news-out?e=[UNIQID]
Start doing your due diligence and watch the stocks in our actionable reports for yourself. We are constantly raising the bar and separate ourselves from the rest of the small-cap newsletters as the best in business.
***Our next newsletter is due out March 14th, 2018 at 9:45 AM, covering a low float NASDAQ company in a high growth industry that is very active in M&A.
We know with a large following comes a large responsibility as we have everyone from institutional investors to the beginner following our profiled securities in our newsletter. This is something we take very seriously always seeking small cap growth companies that have both near and long-term potential for our members
Disclaimer
Traders News Source is a wholly owned subsidiary of Traders News Source LLC, herein referred to as TNS LLC.
Traders News Source has not been compensated for this report by anyone and the opinions if any are that of the author Brindha Dhanabalan, CFA. Author’s Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I, wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.
This web site, published by TNS LLC, and is an investment newsletter that is built on the premise of assisting individual investors in learning about investing. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers. TNS LLC does not give buy or sell recommendations. We do purchase distribution rights from analyst, financial writers and bloggers for a fee that may be licensed to issue price targets and recommendations. Furthermore, we encourage you to speak to a licensed professional prior to making an investment in any type of publicly traded security.
We do sell advertising to other companies including brokerage firms, web sites, publicly traded issuers, investor relations firms, and investment publications, among others. TNS LLC makes no warranty as to the policies of these organizations, and in no way endorses their offers, services, or the content of their advertisements.
When an advertiser is a publicly traded company or a third party acting on behalf of a public company, we fully disclose all compensation in the email advertisement. Such disclosure is included in a disclosure statement in each of the advertisements sent via email.
17B Disclosure
Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.
PLEASE NOTE WELL: TNS LLC and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.
Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operator’s owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D.
TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled.
The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects”, “foresee”, “expects”, “will”, “anticipates”, “estimates”, “believes”, “understands”, or that by statements indicating certain actions & quote; “may”, “could”, or “might” occur.
Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.
