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Lucara extends sales deal with HB by 10 years

A 393.5 carat top white Type IIa gem quality diamond dug up at Karowe. (Image courtesy of Lucara Diamond.)

Canada’s Lucara Diamond (TSX: LUC) has extended its sales agreement with HB Trading covering high-value diamonds from the Karowe mine, in Botswana, for another ten years.

The contract will see Lucara’s +10.8 carat production sold at prices based on the estimated polished outcome of each diamond. This is 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 company first partnered with HB in 2020 to sell Karowe’s large, high value diamonds. These kinds of gems have historically accounted for about 60% to 70% of Lucara’s annual revenues.  

The fresh agreement extends this arrangement for ten years, Lucara said.

“For the first time in our ten-year history, we have insight on what becomes of each and every +10.8 ct rough diamond produced from our mine, participating in each step of the planning and manufacturing process right through to the final polished sale,” Lucara CEO Eira Thomas said in the statement.

The Vancouver-based miner is in the midst of expanding Karowe underground, with first production expected in mid-2026. The project will extend the mine’s life until 2040.

Karowe remains one of the highest-margin diamond mines in the world, producing an average of 300,000 carats each year.  

Since beginning commercial operations in 2012, it has become the only mine in recorded history to have yielded two 1,000+ carat diamonds — the 1,758 carat Sewelô in 2019 and the 1,109 carat Lesedi La Rona in 2015, which sold for $53 million.