The smaller size stones market remains soft!

The long-term ND prices outlook remains resilient!! 

In a report Lucara Diamond shared their view on Diamond Market. Lucara said, the long-term natural diamond (ND) prices outlook remains resilient due to favourable supply and demand dynamics due to decreasing production volumes from major operating mines. 

However, the smaller size stones market remains soft as demand is impacted by a weak Asian market and the increasing uptake of laboratory-grown diamonds. Demand for stones larger than 10.8 carats remains robust, as reflected in the Company's sales in the plus 10.8 carats category. 

The G7 sanctions on Russian diamonds over one carat, effective March 2024, caused some trade delays with import times returning to normal during the quarter. The Company views the sanctions as short-term support for diamond prices, as the emphasis on stone provenance increases. Lucara, with its established operations producing exceptional Botswana diamonds, stands to benefit from this heightened focus on origin verification.

Prices of laboratory-grown diamonds have continued to decrease in 2024 with production outweighing demand for these products. In mid-2024, De Beers announced it will cease creating synthetic diamonds and will instead direct its efforts to sell natural diamonds.

This is in conjunction with several major brands confirming that they would no longer market laboratory-grown diamonds. The longer-term market fundamentals for natural diamonds remain positive as demand is expected to outpace future supply, as supply has been declining globally over the past few years.  

By adding further, Lucara Diamond reports at the 3Q 2024 end, this section provides management's production and cost estimates for the remainder of 2024 (4Q). 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 since the marketing, analysis, cutting and ultimate sale of such diamonds is highly complex.  

It could take in excess of a year to monetize the significant value for each diamond. Accordingly, until all the proceeds from the sale of a large diamond are considered to be collectible, the diamond is held as inventory and valued at cost. No changes have been made to the guidance released in November 2023 except for 2024 full year's revenue and capital costs for the Karowe UGP.