Lucara Diamond's (TSE:LUC) second exceptional stone sale of the year reassured broker Dundee that the Botswana-focused group's annual revenue guidance of between $200mln and $220mln is achievable, it said, repeating a 'buy' on the shares.
The stone tender included 13 single stones totalling 1,440 carats, which achieved revenues of US$29.7 million or $20,625 per carat. The first tender of the year achieved US$68.7mln.
The results were within the historical range, but at the low end of past exceptional stone tenders, analyst Mathew O'Keefe said.
Included in that was an 8.03 carat pink diamond, which sold for $911,911 or$113,563 a carat, which was well above the top end of the historic US$20,000/ct to US$60,000/ct range for past exceptional tenders, the analyst added.
O'Keefe noted that Lucara had booked $188.3mln in revenue in the year to date.
The broker also noted that Lucara recently recovered a 348 carat and a 255 carat stone using its new XRT unit, which should continue to reassure investors in that large stones continue to be recovered come from its Karowe mine.
It has a price target of C$2.25 a share, which is a fair distance from the current price of C$1.34.
"We continue to see Lucara as a top name in the diamond space given its strong cash flow profile and healthy balance sheet," said the broker.