Loss-Making Lucapa Forced into Administration
May 25, 25
(IDEX Online) - Lucapa Diamond Company has appointed voluntary administrators after sustained low diamond prices and operational challenges left the Australian miner unable to meet its financial obligations.
The company said (on 23 May) that Melbourne-based KordaMentha Restructuring - specialists in distressed companies -would undertake "an urgent assessment of the group and its operations ahead of a dual-track recapitalisation and sale process".
Richard Tucker and Paul Pracilio of KordaMentha have been appointed as administrators to Lucapa and its subsidiaries, including Brooking Diamonds Pty Ltd, Heartland Diamonds Pty Ltd, and Australian Natural Diamonds Pty Ltd.
Lucapa requested a trading halt on the Australian Securities Exchange (ASX) on 14 May, and its shares were suspended from quotation by 16 May.
The company holds a 40 per cent stake in the Lulo alluvial mine in Angola and is developing the Merlin Diamond Project in the Northern Territory, Australia.
Last June, Lucapa offloaded its 70 per cent stake in the Mothae mine, in Lesotho, to a local contractor for a nominal sum.
In its latest quarterly update, Lucapa reported a 36 per cent revenue increase and a 42 per cent rise in average per carat prices ($1,523) after resolving an 18-day blockade at its flagship Lulo mine related to community demands over social programs.
Despite these improvements, cash and receivables at quarter-end fell to A$2m, a year-on-year decline of 41 per cent.
The company reported a net loss of $1.5m for 2024, citing lower diamond prices, production disruptions, and challenging market conditions.
The company had secured firm commitments to raise A$2.67m through a share sales agreement and halved its office staff to reduce overheads.
Administrators are now working to preserve value for creditors and stakeholders as they assess the company's assets and operations.
Pic courtesy Lucapa shows Lulo mine.