Safdico, Graff's subsidairy, provides the highend jewellery house with rarest polished diamonds from accross the world. Under the agreement signed, Safdico will purchase 60 per cent of diamond roughs from Lulo mine.
The Lulo diamonds purchased by Safdico are placed into the cutting & polishing partnership. Once procurement and manufacturing costs are deducted, the profits generated beyond the mine gate from the sale of the resultant polished diamonds are shared equally between SML and Safdico.
To date, Safdico has purchased 4,900 carats of run of mine rough diamonds from SML under this commercial partnership. SML is due its first share of the partnership profits from Safdico this quarter (Q1 2020). This new Lulo revenue stream represents another key milestone for Lucapa’s value-adding strategy.
The new revenues streams come as SML completes a self-funded US$12 million capital investment program designed to expand total group production to >60,000 carats in 2020 (on a 100% basis). This production increase, coupled with the new revenue streams generated from the cutting & polishing agreement with Safdico, will enable SML to generate higher returns for its partners and make more regular loan repayments to Lucapa.