Join our community of smart investors
OPINION

Lucara unearths monster diamond

Lucara unearths monster diamond
November 20, 2015
Lucara unearths monster diamond

Separately, Lucara, which holds assets and exploration licenses in Botswana, said it had actually recovered two more exceptional white stones through the XRT diamond units. These were relative tiddlers, coming in at 813 carats and 374 carats, but headline-making in normal circumstances.

To put the matter into perspective, Lucara sold a 342 carat Type-IIa diamond (the most valued and purest specimens) midway through this year for $20.6m (£13.4m). That works out at around £38,961 a carat. So theoretically the three Lucara stones could be worth up to £90m; equivalent to just under a third of the miner's current market-cap. Realistically, however, it is far too early to ascribe a value to these stones, given that it is largely dependent on their colour, clarity and cutting characteristics.

The Lucara revelations underline why smaller diamond miners offer one of the more interesting plays for investors, or at least for those who have assigned a speculative element within their share portfolio. Discoveries of large high grade stones really can have a 'transformational' effect on the balance sheets of junior miners (an over-used term but wholly apt in this case). It’s worth noting that prices for diamonds graded at 10 carats or over have held up well this year, while prices for standard grade stones have been in retreat.