Lulo to receive US$ 4million
Lucapa Diamond Company Limited and its partners Endiama and Rosas & Petalas announce that Lulo alluvial mining company is to receive US$4.0 million or A$7.0 million, under the partnership agreement with leading international diamond manufacturer Safdico International (Safdico).
The US$4.0 million comprises 1: A US$1.5 million (A$2.6 million) payment in respect of SML’s share of profits from the cutting & polishing and/ or sale of a run of mine Lulo diamonds sold to Safdico in 2019 under the partnership agreement; and 2: US$2.5 million (A$4.4 million) payment for the purchase of the Lulo 46 carat pink rough diamond. SML will retain a share in the margins generated from the resultant sale of diamonds polished from this exceptional rough stone.
The US$1.5 million payment is a milestone for Lucapa, its project partners and SML as it represents the first share of profits paid to SML under the Safdico partnership agreement (Refer ASX announcement 29 January 2020). Under this partnership agreement, SML is paid upfront for the rough market value of the Lulo diamonds sold to Safdico, with both companies sharing in the resultant margins generated.
Safdico, as a preferred buyer of SML, can purchase up to 60% of Lulo’s annual rough production from SML, as is permitted under Angola’s transformative new diamond marketing regulations. Safeco is a subsidiary of Graff International, one of the world’s finest high-end jewelry houses. Safdico supplies Graff with some of the most iconic and valuable polished diamonds sold in Graff stores.
The 46-carat pink is the latest Lulo diamond to be sold to Safdico under the partnership agreement. SML will receive US$2.5 million for the rough value of the stone and retains a share in the margins generated beyond the mine gate.
Lucapa Managing Director Stephen Wetherall commented: “Given the recent market uncertainty and disruption caused by a coronavirus, we and our Lulo partners believe the sale of the 46-carat pink diamond to Safdico under a partnership agreement will unearth the true potential and value of this exceptional stone.”
“We look forward to seeing the polished diamonds produced from this exceptional Lulo gem, which we are confident will see the additional value created by the partnership.”