LUCARA Diamond Corporation, a Toronto-listed firm that mines from Botswana’s Kaorwe mine, said it would increase its annual dividend to 10 Canadian cents per share for its 2017 financial year.
“Our performance resulted in a special dividend payment in 2016 and we anticipate increasing our 2017 dividend from six Canadian cents per share to 10 cents per share,” said William Lamb, president and CEO of Lucara Diamonds.
The dividend would be paid in four equal payments at the end of each financial quarter, the company said. The amount of any dividend declared will remain at the company, it added.
Including a $132m special dividend last year, the company has paid out a total of $185m, more than 20% of total revenues generated since the company began its dividend policy in 2014.
The returns are based on the strong performance of its Karowe mine which yielded the now famous Lesedi La Rona diamond which, at more than 1,109 carats, is the largest since the Cullinan diamond was discovered in 1905.
Lucara said today in a forecast of 2017 performance that it had budgeted revenue of between $200m and $220m which would exclude the potential sale of Lesedi La Rona and other high value diamonds, the occurrence of which was impossible to forecast. “The company therefore considers sales from these diamonds as additional revenue to the baseline $200m to $220m revenue forecast,” it said.
Production is forecast to be between 2.2 and 2.5 million tonnes of ore producing between 290,000 and 310,000 carats of diamonds with most of the production coming from the lower grade south lobe of Karowe.
“However, the overall diamond quality and value of the south lobe is much higher and has historically resulted in significantly increased revenue and cash flow,” the company said. Operating cash costs are expected to be between $36 and $40 per tonne, it said.
The Lesedi La Rona diamond was pulled from an auction earlier this year as it failed to attract the reserve price but Lamb said he was confident it would be sold at an appropriate price. The diamond was estimated to fetch about $70m.
