Lesedi La Rona seen fetching P900m at London auction

Brian Benza | Friday June 17, 2016 14:19

 

Speaking at a mining conference held in Gaborone this week, Lucara chief operating officer, Paul Day said basing on figures of $77,000 per carat fetched by a 813-carat stone they sold in May, they expect Lesedi La Rona to attract a price of more than $80 million.

“It’s unchartered waters for us because the only ever diamond discovered of this size was more than a century ago and it wasn’t sold through an auction. But judging from our initial estimates, we believe we can sell it for more than $80 million,” he said.

The price is an upward revision from the $70 million that was predicted earlier this month before the company sold the 813-carat stone.

The stone measures 65 by 56 by 40 millimetres, which is about the size of a tennis ball. One carat is equal to a fifth of a gram, so Lucara’s 1,109-carat diamond weighs 222 grams.

Day said ahead of the auction in London on June 29, the diamond had already been showcased to potential buyers in Hong Kong, Singapore, New York, Geneva, Dubai and Antwerp.

Lesedi La Rona is the biggest diamond discovered since the famed Cullinan measuring more than 3,000 carats was found in South Africa in 1905. On a year-to-date basis, Lucara has sold diamonds worth more than $165 million from its Karowe mine through auctions.

Karowe is forecast to process up to 2.4 million tonnes of ore, producing over 350,000 carats of diamond in 2016 with revenue seen between $200m and $220m.

The revenue forecast however excludes the sale of high value diamond inventory such as the Lesedi La Rona and the 813-carat stone.  Karowe’s operating cash costs are expected to be between $33.5 and $36.5 per tonne ore treated.

“Capital expenditures in 2016 include the installation of a Mega Diamond Recovery circuit for a total investment of between $15 million to $18 million and sustaining capital expenditure is forecast to be approximately $11 million.

“Sustaining capital includes a mill re-liner cost of $1.5 million and an investment of $1.5 million for a combined sales and administrative office in Gaborone,” said Day.

An exploration budget of up to $7 million is forecast for advanced bulk sampling and drilling works at the company’s two Botswana prospecting licences.