Shares in Lucara Diamond Corp (TO:LUC) surged nearly 5% today following positive coverage from Norwegian investment firm Pareto Securities, which has a significant following in the shipping and energy sectors.
Shares in the Toronto Stock Exchange listed Lucara, which operates the Karowe diamond mine and Mothae development projects, both in Botswana, Southern Africa, reached $2.48 intraday, before closing at $2.43, up $.11 on 420,000 shares traded.
Pareto sees Lucara’s share price rising further now that the company is debt-free and paying a dividend, giving a “Buy” rating and $2.97 price target in the initial 48 page research report.
The Norwegians expect Lucara to earn $254 million in revenue this year, up 33% from last year. Importantly, revenues from the first half of 2014 are likely to be close to the company’s full year guidance. The recovery of exceptional stones could even improve this picture and Lucara will hold a special stones tender on July 16, 2014.
Additionally, Pareto discussed the new XRT recovery unit that Lucara is currently installing at the Karowe mine, which detects carbon atoms rather than fluorescence, using X-Ray technology, and will put Lucara at the technological forefront of diamond miners globally for the bulk sorting of kimberlite ores.
Long time readers of CEO.ca know we recommended the shares at $.58 in August 2012 (A new age for Lucara Diamond Corp – here) and have covered the company many times since. Lucara has been a huge success and another example of the potential for value creation when a new mine enters production.
Lucara is part of the Lundin Group of Companies, led by Swedish tycoon Lukas Lundin, a chronically successful natural resources developer.
More about the company can be found at their web site:
I have no position in Lucara now as I sold too early… What? I needed the money!