Exceptional Diamonds: The Company recovered its largest gem quality diamond at 342 carats. The diamond will be offered for sale at the Company's first exceptional stone tender in 2015.
Plant Optimization Project: A primary focus for the Company in 2015 is to complete the plant optimization program so that it can commence mining the high value south lobe ore on a sustainable basis during the year. The project has advanced very well with construction largely complete within the $55 million budget and with no disruption to current operations or production. The project is forecast to be complete within the $55 million budget. Commissioning has commenced and operational ramp up is expected to be complete during the second quarter of the year. The Company plans to start treating stockpiled south lobe ore during the second half of this year.
Cash flows and operating margins: The Company achieved revenue of $29.6 million or $277 per carat yielding a 61% operating margin of $169 per carat during the period. The Company's EBITDA (see page 8 Non-IFRS measures) at the end of March 2015 was $11.9 million. Diamond revenue is lower compared to the previous year largely due to the processing of lower quality north lobe material during the quarter as south lobe material is stockpiled until the plant optimization project is complete.
Net cash position: The Company's quarter-end cash balance was $87.5 million compared to a cash balance of $56.8 million at March 31, 2014 and $100.8 million of cash at the end of 2014. The decrease in cash during the period is due to the expenditures on the Company's plant optimization project and tax payments of $20.3 million reflecting the final Q4 2014 payment and the Company's Q1 quarterly instalment. Company's Scotiabank $50 million credit facility remains undrawn.
Karowe operating performance: Karowe's operating performance was in line with plan during the period in terms of ore and waste mined and carats recovered. Carats recovered were marginally below forecast. Diamond liberation is expected to improve once the tertiary crusher is commissioned. The operation performed well during the period meeting its operational targets while significant construction activity occurred on site as the Company advanced towards completion of the plant optimization project. The mine recovered 153 specials (+10.8 carats) with an average size of 27.7 carats.
Adjusted Earnings per share: Adjusted earnings per share (see pages 5 and 8 Non-IRFS measures) is $0.02 per share for the three month period ended March 31, 2015 (2014: earnings per share $0.02).
Botswana Prospecting Licenses: The Company was awarded two precious stone prospecting licenses located within a distance of 15 km and 30 km from Karowe in 2014. The Company is currently constructing a bulk sampling plant and will commence exploration work programs on the two prospecting licenses during 2015.
Dividend announcement: The Company is announcing a semi-annual dividend of Canadian $0.02 on the issued common shares of Lucara which is payable on June 18, 2015 to the common shareholders on record of the Company on Friday June 05, 2015.
Mothae Sale: On May 1, 2015, the Company has entered into a binding memorandum of understanding ('MOU') for the sale of the Mothae Diamond project to Paragon Diamonds Limited. In consideration, the Company will receive $8.5 million cash payment and 5% of profits earned from the sale of the polished stones and/or rough diamonds not selected for polishing from the first 6.75 million tonnes of ore processed at Mothae by Paragon. The completion of the MOU is subject to the approval of the Lesotho Government.