Lucara Diamond Corp. has announced that it has entered into an extended diamond sales agreement with Lucara Botswana (Proprietary) Limited, and HB Trading BV, for the purpose of selling +10.8 carat rough diamonds produced from Lucara’s Karowe mine until December 31, 2032.
Lucara first partnered with HB in 2020 to sell Karowe’s large, high value diamonds, which have historically accounted for approximately 60% to 70% of Lucara’s annual revenues. The Agreement extends this arrangement for 10 years.
Under the Agreement, Lucara’s +10.8 carat production is sold at prices based on the estimated polished outcome of each diamond, determined through state-of-the-art scanning and planning technology, with a true up paid on actual achieved polished sales thereafter, less a fee and the cost of manufacturing. The Agreement is consistent with the terms of the previous arrangement with HB, with refinements to more accurately reflect how the parties have been working together.
The pricing mechanisms of the Agreement with HB results in complete transparency within the value chain, creating important alignment between all participants in the value chain, and delivering regular cash flow at superior prices for this important segment of our production profile.
Eira Thomas, CEO commented, “It has been more than two years since Lucara initiated this transformational approach to sales of its highest value diamonds, working in collaboration with HB to create alignment along the value chain, differentiating diamonds from Karowe on the basis of provenance, excellence in manufacturing and a commitment to complete transparency for all stakeholders. For the first time in our 10-year history, we have insight on what becomes of each and every +10.8 carat rough diamond produced from our mine, participating in each step of the planning and manufacturing process right through to the final polished sale. Not only has this approach stabilized prices for our most valuable production segment, it has demonstrably grown demand, a core objective.
As one of the world’s most important sources of large, high value type IIa diamonds, our approach provides consumers with complete confidence in the origin of their diamonds and full insight on how our business is governed, delivering on our commitments to industry leading, best practice in responsible mining in Botswana.”
Oded Mansori, Co-founder and CEO of HB Antwerp said, “Over the past two years, we have fostered a close partnership with Lucara by providing unprecedented insight into the diamond value chain, using data and information to align interests and maximize positive impact. The Lucara – HB agreement reflects the renewed commitment of both companies to embrace a new approach to sourcing, transforming, and distributing mineral resources – based on equity, transparency, and sustainability, providing meaningful benefits to all participants, including the people and communities of Botswana.”