Why is Lucapa Diamond (ASX:LOM) gaining attention on ASX today

Highlights 

  • Lucapa Diamond Company has witnessed a robust upgrade to its CY2021 full-year attributable guidance, with EBITDA increasing by around 45%.
  • Attributable revenue stand at AU$66-71 million.
  • Attributable total cash operating cost stand at US$828-844 per carat.

ASX-listed Australia-based Company engaged in the mining and exploration of diamond projects Lucapa Diamond Company Limited (ASX:LOM) announced a significant upgrade to its CY2021 full-year attributable guidance on Thursday.

The upgrade sees the Company’s full-year EBITDA increased ~ 45% to AU$26 – 28 million following solid operational performances from both the Lulo and Mothae mines, notwithstanding expansion ramp up and weather challenges at Mothae. 

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In its upgraded Full Year CY2021 Guidance, the Company reported:

  • Full Year CY2021 attributable cash operating margin (EBITDA) increased by ~45% to AU$26 – 28 million (previously AU$17-21 million)
  • Attributable diamond production of 35,000 - 37,200 carats
  • Attributable revenue of AU$66 – 71 million
  • The weighted average price of US$1,242 - 1,312/ carat, with prices back to higher levels last seen in 2012
  • Attributable total cash operating cost of US$828 - 844/ carat
  • Forecast exploration/ development capex of A$8 – 10 million, with a focus on the Merlin and Lulo JV projects
  • Attributable growth capex of AU$6 – 9 million includes the in-field screening plant for the Lulo mine to reduce haulage costs and the recently completed 45% plant expansion at Mothae.

 The stock LOM closed 5.454% higher at AU$0.058 per share on ASX today.

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Bottom Line:

The Company has predicted an increase in the weighted average rough diamond price due to the prevailing strong market demand, rough supply constraints following the pandemic (seeing current diamond prices at levels last seen in 2012) and large and fancy pink diamond recoveries resultant from the revision of the Lulo mine plan as noted above. In addition, LOM has maintained that the forecast record financial performance at Lulo this year is expected to accelerate returns to Lulo shareholders and the capital loan repayments to Lucapa, which the Company intends to utilise in reducing the corporate debt levels.

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