Exploration and mining company Lucara Diamond has reached an agreement to acquire digital solutions provider Clara Diamond Solutions in an effort to strengthen its supply chain.

The acquisition will give Lucara access to a digital sales platform that uses a blockchain to help improve diamond sales process.

Clara combines analytics with Cloud and blockchain technologies to modernise the existing diamond supply chain and drive efficiencies.

Under the agreement, Lucara will initially offer Clara. 13.1 million shares, valued at a total price of $29m.

Subject to achievement of performance milestones linked to total revenues generated through the platform, Lucara will make additional staged equity payments totalling 13.4 million shares.

Lucara Diamond CEO William Lamb said: “The recent acquisition of Clara marks an exciting milestone for the company and is consistent with our approach of looking well beyond existing industry practice, adopting innovation and progressive development as a key pillar of the company’s success.”

The application of computing algorithms allows Clara to match rough diamond production to specific polished manufacturing demand on a stone by stone basis.

“Buyers can use the digital platform to source customised rough diamonds to meet specific polished diamond demand.”

Buyers can use the digital platform to source customised rough diamonds to meet specific polished diamond demand.

The acquisition will allow Lucara to expand its customer base and have a stable cashflow, as well as giving it an opportunity to diversify its business.

The company is planning to use a selection of the diamond production from its Karowe diamond mine to commercialise the Clara platform in the near-future.

Subsequently, the company will see increased use of Clara to accommodate diamond uptake from multiple sources across the supply chain.

According to an agreement reached with Lucara, the founders of the Clara technology will retain 13.33% of the annual earnings before interest, tax, depreciation and amortisation (EBITDA) generated by the platform, while the management of Clara will retain 6.67%.

The profit-sharing mechanism has a cap of $25m per annum and is valid for a ten-year term.