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by Will Purcell

The diamond and specialty minerals stocks box score for Tuesday was a weak 67-110-133 as the TSX Venture Exchange fell five points to 551. Adam Lundin and Dr. William Lamb's Lucara Diamond Corp. (LUC) lost one-half cent to 38 cents on 58,000 shares. The company has signed a 10-year diamond sales agreement with Antwerp-based HB Group, through which it will sell all qualifying diamonds weighing over 10.8 carats that are produced from its Karowe mine in Botswana.

Under the terms of the agreement, HB will pay Lucara a sum for each diamond based upon the mutually agreed "estimated polished outcome" as determined through scanning and planning technology -- not to mention the decade of experience with Karowe diamonds. And that is not all: Lucara expects an additional "sales uplift" -- a highfalutin top-up payment -- based on the achieved selling price of the gems down the road, less a fixed margin kept by HB for its efforts.

This pricing mechanism, Lucara cheers, is expected to deliver regular cash flow at better than conventional diamond industry tender prices -- cash flow sorely needed to carry on with the underground expansion of the Karowe mine that will keep it running to at least 2040. There are other benefits to the arrangement, Lucara says, including anticipated "potential revenue upside" with large and complex rough diamonds, as the cutters are likely to do better than the planners initially expect. Lucara also points to the streamlined diamond evaluation, sales reporting and payment mechanisms as cause for optimism.

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