Lucara sells Clara diamond sales platform to HRA and former CEO Eira Thomas

Lucara Diamond (TSX: LUC) is selling its Clara rough diamond sales platform to its original founders, a group led by the HRA Group of companies and Lucara founder and former CEO Eira Thomas.

The group has agreed to pay US$3 million on closing of the deal, and return 10 million Lucara common shares initially issued as partial consideration when Lucara acquired the digital sales platform in 2018. Lucara will also transfer liabilities tied to sales performance metrics or a change of control valued at 13.4 million common shares. 

Lucara will retain a 3% net profit interest on the net earnings of Clara. The diamond miner has also granted Clara a five-year rough diamond supply agreement, which may be terminated after the second anniversary or on agreement between the parties.

Thomas stepped down as CEO of Lucara last August. Lucara’s sole producing asset is its Karowe mine in Botswana, which has churned out many large, high-value diamonds since startup in 2012.

“The divestiture of Clara enables us to intensify our strategic focus on maximizing returns and long-term value creation at our world-class Karowe diamond mine in Botswana,” Lucara president and CEO William Lamb said in a statement. “The company’s core competencies and future growth reside in the successful execution of the Karowe underground expansion project.” 

The Clara platform modernizes how rough diamonds are sold, using technology to connect buyers and sellers. It enables buyers to trace the provenance of individual rough diamonds, addressing the industry’s need for improved standards of transparency and trust. 

Aaron Ariel, current managing director and original founder of Clara said the group hopes to turn the platform into the “industry’s premier global rough diamond marketplace.”

“Nine years ago … we had a big idea for a technology that could transform the global rough diamond market for everyone,” Ariel said. “Today, we are excited about the opportunity to realize its full potential, which remains largely unexplored.”

Lucara shares traded at 45¢ this afternoon in Toronto, giving it a market cap of $205 million.

Its shares have traded between 28¢ and 63¢ over the past 12 months.