Ann: Trading Halt, page-86

The Miles Kennedy-led Lucapa Diamond Co appears to have made a breakthrough discovery in Western Australia’s Kimberley, stoking hopes that the region’s days as a diamond province may not be done yet.

Perth-based Lucapa is expected to emerge from a trading halt today to detail exploration results from its Little Spring Creek prospect. The company carried out exploration drilling at Little Spring Creek, part of Lucapa’s broader 80 per cent-owned Brooking project, late last year and sent drill cores off for analysis.

Lucapa is believed to have intersected high concentrations of diamonds from drilling, recovering more than 100 micro and macro diamonds from just one of the drill holes.

Such a result would draw comparisons to the initial discovery that eventually became the Ellendale diamond mine, just 40km west of Lucapa’s new find.

The original development of Ellendale, which was once the supplier of about half of the world’s so-called fancy yellow diamonds, was led by Mr Kennedy during his time at the helm of Kimberley Diamond Co. KDC was taken over by British group Gem Diamonds in 2007.

Lucapa is best known for its work in Angola, with its Lulo project proving a prolific source for large, high-quality alluvial diamonds. Its protracted hunt for the original source of those alluvial diamonds has tested the patience of the market, however, with Lucapa shares touching fresh one-year lows in recent days.

Shareholders may also need to be patient before Lucapa can follow up any exploration success at Little Spring Creek, with the company likely having to wait until the end of the Kimberley’s wet season before it can return and step up exploration efforts.


Any breakthrough at Brooking could be significant for WA’s diamond industry, given Ellendale was shut in 2015 and Rio Tinto’s big but ageing Argyle mine is set to close in three years. Ellendale has had a chequered recent history. Gem Diamonds sold the mine to Russian-born investor Alex Alexander in 2013 for just $3.25m, who then relisted the mine on the ASX under the name Kimberley Diamonds. But it ran into trouble and the holding subsidiary was put into administration in 2015.

The Australian recently revealed that the WA Department of Mines, Industry Regulation and Safety was preparing to call for expressions of interest over Ellendale in the hope of finding a new owner willing to reopen the mine.

A previous attempted sale process of Ellendale failed to attract much interest, thanks in no small part to the roughly $30m of environmental liabilities attached to the asset. In addition to its work in Angola, where it has to date found and sold about $US85m worth of diamonds, Lucapa has been looking to reopen the recently acquired Mothae diamond mine in Lesotho and is planning to start exploration in Botswana