A 1,111-carat diamond almost as big as a tennis ball was found this week in a Botswana mine, sending stocks soaring for the small Canadian company that owns it, and whose biggest problem right now is trying to figure out its value.
Vancouver-based Lucara Diamond Corp. announced the discovery of the world’s second-largest gem-quality diamond ever recovered at its Karowe mine in north-central Botswana, BusinessInsider reported.
The Type IIa diamond measures 65 millimetres by 56mm by 40mm. Lucara is the mine’s sole owner and operator.
Only one larger known diamond has ever been recorded. The 3,106-carat Cullinan was found in the Premier mine in South Africa in 1905. It was carved up into smaller stones. The two largest — the Great Star of Africa and the Lesser Star of Africa — are part of the British crown jewels.
William Lamb, CEO of Lucara Diamond Corp., said: “This historic diamond recovery puts Lucara and the Karowe mine amongst a select number of truly exceptional diamond producers.”
Several other huge white diamonds were discovered at Karowe this week, including a 374-carat stone and an 813-carat gem the company said was the sixth-largest ever found, WallStreetJournal reported.
“The significance of the recovery of a gem-quality stone larger than 1,000 carats, the largest for more than a century and the continued recovery of high-quality stones from the south lobe, cannot be overstated,” Lamb said.
Botswana is one of the world’s top producers of mined diamonds, along with Namibia and South Africa.
Lucara’s shares were up 28 percent in Toronto today on news of the discovery, WSJ reported.
CNN reported a 32 percent surge in Lucara’s stock on news of the biggest gem quality diamond found in more than 100 years. The stock market movement added about $150 million to the value of the company, CNN reported.
Lucara’s three diamond discoveries couldn’t have come at a better time. Diamond prices have fallen because of high inventory and poor demand, especially in China, WSJ reports.
Exceptional diamonds, however, are still seeing extremely high prices.
The discoveries have reversed Lucara’s fortunes, according to CNN. Its shares, which are listed in Toronto and Stockholm, lost 26 percent this year before the recent finds changed all that.
Fewer than 1 percent of the world’s diamonds are Type IIa, according to CaratsDirect2u, a New York-based diamond seller. They’re almost pure carbon, with no significant nitrogen — the impurity in diamonds that gives it a yellowish hue. The lack of yellow makes for a pure, very valuable colorless D, E or F-color diamond. Type IIa diamonds are capable of conducting electricity. Most of the time they are perfectly colorless. The Cullinan was Type IIa.
Most of Types IIa diamonds are large — over 10 carats, according to CaratsDirect2u.
On a conference call with investors, Lamb said Lucara has already been inundated with emails from potential buyers, CNN reports. “It’s early days,” he said. “We need to see how best to get the maximum value of the stone.”
The stone is too big for Lucara’s scanner so it will probably be sent for assessment to the diamond polishing market in Antwerp, Belgium.
The Lucara diamond could fetch more than $60 million based on recent sales of large stones the company has found, said Numis Securities analyst Phil Swinfen, a former diamond-mining geologist, WSJ reports. Lucara sold a 342-carat Type IIa diamond discovered in April for $20.55 million. That’s $60,087 per carat.
“Given this stone is likely to be historically significant, the value could take on a life of its own and achieve significantly more—all flowing straight to Lucara’s bottom line,” Swinfen said. “This is immensely good news for Lucara, perhaps the best week in the company’s history.”
This diamond is the biggest ever dug up by machines, Lucara said. It was found using the latest in recovery technology, CNN reported. With older equipment, Lamb said, it might have been missed and ground up with waste stones.