Lucapa Diamond Co. continues debt repayment progress

LUCAPA Diamond Company made further in-roads into its debt pile after it repaid A$10.5m to New Azilian, a company associated with the firm’s non-executive director Ross Stanley. Assets held as security have also been released.

The Lesotho diamond producer has now rubbed out A$17.6m in debt from its balance sheet in the last 14 months, a critical development, according to CEO Stephen Wetherall.

“All three of our financiers, New Azilian, Equigold and The IDC of South Africa (Industrial Development Corporation), have been instrumental in partnering with Lucapa to achieve the successes on our mines and exploration assets,” Wetherall said.

“Our financiers have not only provided the required funding for mining development and exploration, but also the understanding and patience when the diamond industry stumbled at the onset of the pandemic in 2020 and our operations were impacted.”

The company, which also mines diamonds in Angola, reported preliminary earnings before interest, tax, depreciation and amortisation (EBITDA) of A$22.3m for the 12 months ended December 31. Lucapa is due to report its full results by the end of the first quarter.

Diamond producers globally have remarked on a strong recovery in the market following the dark days during the Covid pandemic. Owing to a requirement for physical inspections of goods, the diamond sector was heavily disrupted by travel bans during the pandemic.

Eira Thomas, CEO of Toronto-listed Lucara Diamond Corporation said the outlook for the diamond sector was for “one of the strongest diamond markets we have seen in the better part of a decade”.

This echoes a statement from Petra Diamond which said last week there had been a critical structural positive change in the diamond market owing to diminishing new reserves and depletion of stocks in the mid-stream.