Still been watching ur "entertaining" threads on / off and thought would throw up another external commentary from a couple days ago fyi. Have a good one...LOM'ers
There are growing expectations that Lucapa Diamond Company may have found its biggest diamond yet in what could emerge as a major payday for the Subiaco-based group.
Lucapa, which has developed a reputation for unearthing large, high-quality diamonds from its Lulo project in the African nation of Angola, entered a trading halt on Friday pending a “diamond update” from the project.
Lucapa managing director Stephen Wetherall is speaking at an investor conference in South Africa today, and there is speculation he will use the address to unveil the company’s latest large diamond discovery.
The trading halt is unusual for the company and is driving the belief that the newly discovered stone is the biggest yet out of Lulo. It has unearthed two large diamonds in the past month — one of 120 carats and another of 133 carats — but did not call a trading halt before the announcement of those finds.
A spokesman for the company declined to comment.
The high quality and large size of the diamonds out of Lulo has been reflected in the average price Lucapa receives for its production. The company’s last sale resulted in an average collection of $2360 a carat, considerably higher than the global average of about $US120 a carat.
Those average prices out of Lulo would suggest that any big new stone should fetch at least several hundred thousand dollars. Canadian-listed company Lucara Diamonds recently discovered a giant 1111 carat stone — the second-largest diamond ever found — and an 813 carat diamond that analysts at SP Angel estimated would net the company about $US100 million ($141m).
Lucapa is led by Miles Kennedy, a veteran of the diamond industry and the founder of Kimberley Diamond Co, the miner behind the Ellendale diamond mine in Western Australia.
While the company has been successfully recovering big, valuable diamonds from alluvial sands at Lulo, selling almost $20m in diamonds to date, its key goal is to find the original hard rock source of the stones.
The company has identified a large kimberlite pipe beneath its alluvial operations and will start sampling the structure in the coming months to test whether it contains diamonds. The discovery of diamondiferous kimberlite pipes is extremely rare, so any success would likely drive a significant rerating of the stock.
Hartleys analyst Mike Millikan said last week the discovery of a diamond-bearing kimberlite pipe was the “ultimate prize”.
“If a diamond-bearing kimberlite can be identified as the source for these diamonds, then Lucapa has significant upside potential,” Mr Millikan said. Lucapa shares last traded at 32
LOM Price at posting:
32.0¢ Sentiment: None Disclosure: Not Held
