On Wednesday, BMO (TSX:BMO) Capital maintained a Market Perform rating on shares of Lucara Diamond Corp. (LUC:CN) (OTC: LUCRF), with a steady price target of Cdn$0.50. The firm's analysis followed Lucara's release of its 2025 operating guidance for the Karowe mine in Botswana. According to the guidance, the expected revenue and costs are largely consistent with BMO Capital's estimates.
The company's forecast for the quantity of recovered and sold diamonds was slightly below expectations. However, Lucara anticipates a higher yield of diamonds from the more valuable M/PK(S) and EM/PK(S) units within the South Lobe. This higher proportion, estimated at around 79%, is projected to keep the revenue figures aligned with previous forecasts despite the lower volume.
The capital expenditure (capex) for the Karowe underground project in 2025 was reported to be marginally above BMO Capital's earlier projections. The increase in the anticipated capex is attributed to the timing of the expenditures related to the project's development.
Lucara's guidance indicates a strategic focus on extracting higher-value diamonds, which is expected to balance the financial outcomes despite the reduced volume in diamond recovery and sales. The company's emphasis on quality over quantity is reflected in the anticipated revenue, which aligns with the analyst's earlier revenue predictions.
The firm's reiteration of the Market Perform rating and the Cdn$0.50 price target suggests a neutral outlook on Lucara's stock performance. The guidance provided by Lucara shapes the expectations for the company's operational and financial trajectory as it advances with the Karowe mine's underground development.
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