Lucapa finds itself on the edge of greatness after finding the edge of the kimberlite
Warm, warmer, and now hot …
That’s the key message emerging from the exploration updates being issued by Lucapa Diamond Company (ASX: LOM) as it seeks to track down the source of the spectacular gems it is recovering in Angola.
As this week’s announcements show, the diamonds being recovered at the Lulo project are about as good they get.
The latest recoveries include two large special diamonds weighing 120.4 carats and 86.2 carats. Testing confirmed both are Type IIa gems – the most valuable category in the world.
This follows the recent recovery of a 133.4-carat compound diamond earlier his year – the biggest individual stone recovered to date at Lulo – and numerous other large, high-quality stones.
These top-shelf diamonds are generating substantial revenue for Lucapa. But more importantly, their extremely high quality and enormous value highlight the size of the prize for Lucapa should it find the original source.
For investors, the idea that Lucapa will identify the kimberlite pipe which is shedding these gems is truly mouth-watering. As Lucapa Chairman Miles Kennedy told investors at the Resources Rising Stars conference last year, if they find this pipe, “hold onto your hats”.
Given this juicy prospect, it is little wonder that Lucapa’s separate announcement this week concerning the kimberlite hunt attracted much attention.
Lucapa revealed that a crucial gravity survey at Lulo successfully identified a large and well-defined kimberlitic signature which covers a known area of approximately 1.1sqkm and appears to extend beyond the limits of the survey boundary.
Significantly, the kimberlitic signature defined in the gravity survey envelops most of Mining Block 8 and is next to Mining Block 6 – the areas where Lucapa is harvesting its valuable diamonds.
Lucapa Chief Executive Stephen Wetherall said the gravity survey results provided further evidence that this kimberlite structure, known as L259, could be the primary source of the valuable diamonds it is recovering.
This view is supported by the large and angular shape of the diamonds being recovered, larger than average stone size recoveries and the concentration of kimberlite indicator minerals being recovered from the area.
“The gravity results indicate that a kimberlitic signature is situated right under Mining Block 8 and so far covers an extensive area of 110 hectares,” Mr Wetherall said.
“We will now extend the gravity survey to fully define the boundaries of L259 to the south-west and complete the EM survey work this month to assist us in modelling the geology of this large kimberlitic structure.”
Mr Wetherall said a drill rig was scheduled to arrive in Angola in early February 2016.
“As soon as the drill rig arrives on site we can start drilling the outer edges of L259,” he said. “This drilling will be designed to model the shallow geology and identify any near-surface kimberlite material which could be separately bulk sampled and processed through our diamond plant to test for diamond content.”
LOM Price at posting:
32.0¢ Sentiment: Buy Disclosure: Held
