VANCOUVER, BC, May 9, 2024 /CNW/ - (TSX:LUC) (BSE: LUC) (Nasdaq Stockholm: LUC) Please view PDF version Lucara Diamond Corp. ("Lucara" or the "Company") today reports its results for the quarter ended March 31, 2024. All amounts are in U.S. dollars unless otherwise noted. Q1 2024 HIGHLIGHTS: The Karowe Mine has operated continuously for over three years without a lost time injury. The recovery of a 320-carat top light brown gem quality diamond, a 166-carat Type IIa diamond, followed by the recovery of a 111-carat Type IIa diamond in Q1 2024. In January 2024, the successful execution of an amended project financing debt package of $220 million (the "Rebase Amendments") to amend the repayment profile in line with the rebase schedule released in July 2023 for the Karowe Underground Project ("Karowe UGP"). On February 18, 2024, the Company announced the signing of a new ten-year diamond sales agreement ("NDSA") with HB Trading BV ("HB") in respect of all qualifying diamonds produced in excess of 10.8 carats from the Karowe Mine. Total revenue of $41.1 million (Q1 2023: $42.8 million) was achieved in the quarter which is reflective of a combination of the timing of production and quantity of large goods recovered and delivered to HB. During Q1 2024, a total of 93,560 carats of rough diamonds (Q1 2023: 83,374) from Karowe were sold through the Company's three sales channels, generating revenue of $36.2 million before top-up payments of $4.9 million (Q1 2023: $34.7 million before top-up payments of $6.6 million). Operating cost per tonne processed(1) was $26.00, a decrease of 2% over the Q1 2023 cost per tonne processed of $26.65. The continued impact of inflationary pressures, particularly labour, has been well managed by the operation. A strong US dollar (+5%) continues to offset a small increase in costs over the comparable period. (1) See "Non-IFRS Financial Performance Measures" William Lamb, President & CEO commented: "Our Karowe diamond mine delivered another solid operational quarter, continuing its track record of sustainable diamond production from this world-class asset. The Company's high-value diamond production forecast remains robust, underpinned by our focus on operating practices aligned with leading environmental, social and governance standards. Work on the underground expansion project at Karowe also progressed well during the quarter. This key growth initiative remains on track with the rebase schedule and budget, positioning us to access the higher-value ore from the underground portion of the ore body, early in 2028. While the diamond market remained relatively stable in Q1, we observed some cautious sentiment due to the broader macroeconomic climate of high inflation and interest rates impacting consumer demand in certain regions. However, the fundamental supply and demand dynamics continue to favour natural diamonds over the long-term as new mine supply remains constrained. Lucara is well-positioned with our exceptional diamond production profile and our innovative process facilities and sales mechanisms to navigate this environment. We will continue executing our growth strategy while maintaining financial discipline to create sustained value for all our stakeholders."  REVIEW FOR THE QUARTER ENDED MARCH 31, 2024 Operational highlights from the Karowe Mine for Q1 2024 included: Ore and waste mined of 0.8 million tonnes ("Mt") (Q1 2023: 0.5Mt) and 0.2 million tonnes (Q1 2023: 0.8Mt), respectively. 0.7 million tonnes (Q1 2023: 0.7Mt) of ore processed. A total of 89,145 carats recovered, including 7,534 carats from the processing of historic recovery tailings, (Q1 2023: 89,640 carats) at a recovered grade of 11.7 carats per hundred tonnes ("cpht") of direct milled ore (Q1 2023: 12.8 cpht). A total of 160 Specials (defined as stones larger than 10.8 carats) were recovered, with three diamonds greater than 100 carats including one diamond greater than 300 carats. Recovered Specials equated to 5.1% of the total recovered carats from direct milling ore processed during Q1 2024 (Q1 2023: 4%). The Karowe Mine has operated continuously for over three years without a lost time injury. The twelve-month Total Recordable Injury Frequency Rate of 0.30 (Q1 2023: 0.36) at the end of Q1 2024 reflects a continued focus on leading indicators and safe performance. Financial highlights for the three months ended March 31, 2024 included: Revenues of $41.1 million (Q1 2023: $42.8 million) were achieved despite a weaker rough diamond market. First quarter pricing stabilized in smaller goods and increases of 4% were observed compared to the fourth quarter of 2023. Revenue reflects the weighting of Lucara's revenue towards larger goods where pricing is heavily impacted by the individual goods delivered in a period. A 33% increase in the average price of larger goods sold was observed from the fourth quarter of 2023 and 18% from the first quarter of 2023. The price of goods in this size category are significantly impacted by the natural variability in quality of the recovered goods in any individual period. Revenue against plan was impacted by the quantity of larger goods delivered in Q1 2024. Operating margins of 51% were achieved (Q1 2023: 57%). A strong operating margin continues to be achieved through cost reduction initiatives assisted by a strong U.S. dollar. Adjusted EBITDA(1) was $12.7 million (Q1 2023: $15.3 million), with the decrease attributable to the changes in revenue and operating expenses. Net loss was $7.9 million (Q1 2023: net income of $1.0 million), resulting in a loss per share of $0.02 (Q1 2023: earnings of $0.00). The significant change to a net loss is due to the loss on extinguishment of debt of $10.5 million incurred in Q1 2024 in conjunction with recognizing the amendments to the debt package. Cash outflows from operating activities was $4.2 million (Q1 2023: cash flow generated of $20.4 million). Operating cash flow per share(1) generated, before working capital adjustments, was consistent at $0.03 (Q1 2023: $0.03) Cash position and liquidity at March 31, 2024: Cash and cash equivalents of $13.2 million. Working capital deficit (current assets less current liabilities) of $0.3 million. Cost overrun account balance ("CORA") of $37.0 million. $140.0 million drawn on the $190.0 million Project Loan ("Project Loan") for the Karowe UGP. $25.0 million drawn on the $30.0 million working capital facility ("WCF"). The total debt drawn at the end of Q1 2024 was $165.0 million compared to $125.0 million at December 31, 2023. The increase in debt drawn during Q1 2024 largely resulted as the Company did not have access to the Project Loan and WCF from June 2023 until January 2024 when the project finance debt package was finalized. (1) See "Non-IFRS Financial Performance Measures" DIAMOND MARKET The long-term outlook for natural diamond prices remains positive, anchored on improving fundamentals around supply and demand as many of the world's largest mines reach their end of life.  In the short-term, De Beers, the largest diamond producer by value reduced their production guidance by up to 3.0 million carats, for 2024, to assist with stabilizing the diamond market. During the quarter, the G7 sanctions on the importation of Russian diamonds greater than one carat went into effect at the beginning of March and some trade delays were noted in the industry. The new procedures require all rough diamonds larger than 1.0 carat to be processed through the Antwerp World Diamond Centre for validation of point of origin.  The Company sees this as short-term support for diamond pricing as this, together with the reduction in production volumes from De Beers, will result in lower volumes of higher value goods being available in the market. Sales of lab-grown diamonds increased steadily through 2023 and into Q1 2024 with many smaller retail outlets increasingly adopting these diamonds as a product. In Q1 2024, this market underwent further change with a number of major brands confirming that they would not market lab-grown stones. The overall long-term impact will support the natural diamond market as the Company expects a division between the natural and lab-grown diamond market. The longer-term market fundamentals for natural diamonds remain positive, pointing to continued price growth as demand is expected to outstrip future supply, which is now declining globally. 2024 OUTLOOK This section of the press release provides management's production and cost estimates for 2024.  These are "forward-looking statements" and subject to the cautionary note regarding the risks associated with forward-looking statements. Diamond revenue guidance does not include revenue related to the sale of exceptional stones (an individual rough diamond which sells for more than $10.0 million), or the Sethunya. No changes have been made to the guidance released in November 2023. Karowe Diamond Mine Full Year – 2024 In millions of U.S. dollars unless otherwise noted Diamond revenue (millions) $220 to $250 Diamond sales (thousands of carats) 345 to 375 Diamonds recovered (thousands of carats) 345 to 375 Ore tonnes mined (millions) 2.8 to 3.2 Waste tonnes mined (millions) 0.8 to 1.4 Ore tonnes processed (millions) 2.6 to 2.9 Total operating cash costs(1) including waste mined (per tonne processed) $28.50 to $35.50 Underground Project Up to $100 million Sustaining capital Up to $10 million Average exchange rate – USD/Pula 12.5 (1) Operating cash costs are a non-IFRS measure.  See "Non-IFRS Financial Performance Measures". The Company had expected higher diamond recoveries and diamond quality during Q4 2023 and Q1 2024.  This reflects the natural variability in the resource production in both recovery and diamond quality and were it to continue, this may impact revenue guidance for 2024. The Company has seen diamond recoveries and quality improve during April 2024. DIAMOND SALES Karowe diamonds are sold through three sales channels: through the HB sales agreement, on the Clara digital sales platform and through quarterly tenders. HB SALES AGREEMENT FOR +10.8 CARAT DIAMOND PRODUCTION FROM KAROWE For the three months ended March 31, 2024, the Company recorded revenue of $23.2 million from the HB arrangements (inclusive of top-up payments of $4.9 million), as compared to revenue of $24.5 million (inclusive of top-up payments of $6.6 million) for the three months ended March 31, 2023. The volume of carats delivered to HB was lower in the first quarter of 2024 than planned. The volume recognized as revenue in Q1 2024 was impacted by the timing of goods delivered as well as the number of stones greater than +10.8 carats recovered in the period. The plant performance remained strong with a 97% recovery factor achieved in Q1 2024; however, the weight percentage of recovered specials was lower than plan. Recovered Specials for the quarter equated to 5.1% by weight of total recovered carats from ore processed during Q1 2024, with 89% of carats recovered coming from the South Lobe, 7% recovered from the Centre Lobe, and 4% recovered from mixed ...