Quentin Flannery, chief investment officer at Flannery family office, is expected to experience a large windfall through another of his investments, Lucapa Diamond Company Limited (ASX: LOM).
The Mothae Kimberlite mine expansion is nearing completion and promises either improved nameplate capacity or expected sustained production at full load. This capacity will increase by 45% once construction is complete, from 1.1 million tons per year to 1.6 million. The Mothae mine has already been a consistent supplier of large, high-quality diamonds since its opening in 2019 and the expansion of the Mothae mine would not have been possible without Flannery’s investment, which marked the cornerstone of its late capital increase. from last year.
The timing of expansion is ideal, as demand for diamonds begins to rise from the sharp decline in demand triggered by the 2020 epidemic. As manager of a diverse set of holdings, Quentin Flannery brings all of his marketing expertise when it comes to determining the future of certain resources and commodities.
Quentin Flannery’s investment in Lucapa
The success of the Mothae mine expansion is undeniable. So far in 2021, a recently expanded mine in the Kingdom of Lesotho has sold $ 1.5 million in diamonds. The price per carat of mined diamonds reached $ 420 / carat. The Kingdom of Lesotho is a small country with a population of 2.2 million located in South Africa. It has become fertile ground for diamond exploration as it was just opened to foreign investment in 2017. The kingdom is known to be the highest $ / carat diamond producer in the world, with the vast majority of its mines in a cluster high in the Maluti Mountains.
Lupaca is co-owner of the Mothae Kimberlite mine, of which 70% belongs to the Australian diamond producing niche and the remaining 30% to the Kingdom of Lesotho. Flannery’s investment The expansion of the Mothae mine resulted in major changes to the processing plant, including the installation of a new scrubber bypass conveyor, a primary jaw crusher, and other associated improvements.
Quentin Flannery and the Next Generation
Flannery’s quest to expand his family’s portfolio led him to resources that often serve as barometers for the market as a whole, such as silica sands and copper. In this case, the Australian CIO it is hedging its bets on the social mores of the new generations of consumers. Diamonds are rooted in specific traditions and aesthetics surrounding engagement and marriage, as well as larger, more desirable stones that set themselves apart as global wealth creation expands and more consumers in Asia move into the higher categories. of the consumer cycle. By investing in Lupaca’s Mothae mine in the world’s richest diamond country, Flannery is making a very specific bet on future generations, future commitments, and future diamonds.
Now more than ever, the language around diamonds is changing at the retail level. Assumptions about stone as a need for compromise are being questioned as more and more new couples choose alternative options. The notion that diamonds are a necessity is fading, especially as future generations lose interest in traditional jewelry retailers in favor of online shopping. Through websites like Etsy, customers now have more options tailored to their specific interests and aesthetics, including any stone they like, from diamond to emerald to lapis lazuli. The good news is that the move to online shopping allows for more marketing flexibility. Through more personal algorithm-based advertising, diamonds can have a lot broader scope. Beyond associations with engagement and marriage, proper marketing can change the history of diamonds or even connect them with new or existing traditions.
Another major shift in consumer interest comes from the desire of younger generations to be more conscientious and attentive consumers. Younger generations want assurances that the products they buy are ethically sourced and that the working conditions involved in purchasing and delivering those products are also ethical. Increased initiatives towards sustainability in mining practices will be an important factor for younger purchases. Fortunately Quentin flannery has extensive experience in improving sustainability through its other holdings, such as the copper mining company, Cyprium, which is restarting the now-closed Nifty copper mining operations in Western Australia. Similar initiatives with Lupaca could do much to ensure the company’s continued viability and success with future generations of consumers.
The future looks bright for diamonds
The finds at Mothae lend credence to the notion that the Kingdom of Lothae remains the main destination for diamond mining. The quality of the diamonds obtained from the new areas of the mine speaks to Quentin Flannery’s foresight in financing the expansion. While the kimberlite material was predominantly sourced from lower-margin areas of the 8.8-hectare kimberlite pipeline in the first half of 2019, mining has since moved to the higher-margin southern well following dewatering at the dam of main water. Initial recoveries from the south well include two exceptional 101-carat 64-carat D-color Type IIa gems, Mothae’s first two commercially produced diamonds sold for more than US $ 1 million.
The world reopens and consumer confidence increases. With its increased capacity, recent renovations to the Mothae Kimberlight mine place it in the ideal position to benefit from increased diamond sales and ultimately move forward alongside pre-COVID trends. Because the dynamics of diamond demand operates in tandem with GDP and disposable income, as the economy continues to recover, so will diamond sales. While social mores may change from generation to generation, the natural beauty of diamonds and their continued appreciation will remain constant. Diamonds may not be forever, after all, those who can confidently predict the future after the year and a half the world has passed, but they are here to stay. Quentin Flannery is the next generation in his family’s line, the manager of a diverse set of holdings And for now at least, his eye is on the horizon. To the next big win.