Lucara Diamond makes history with 1,100+ carat gem-quality diamond discovery in Botswana

Lucara Diamond's Karowe diamond mine — Photo courtesy Lucara Diamond

Canadian diamond company Lucara Diamond Corp. recently made diamond history when employees discovered an 1,100+ carat gem-quality white Type IIa diamond at the company’s Karowe mine in Botswana.

Lucara Diamonds' 1,111- and 813-carat stones — Photo courtesy Lucara Diamond

The diamond, called Lesedi La Rona, which means “Our Light” in the Setwana language, is the world’s second largest diamond ever recovered and the largest ever found in Botswana.

After completing a world tour this year, the diamond will be sold.

Karowe mine is known for producing some very large, exceptionally high-quality diamonds (including some coloured stones), which are sold by special tender as recovery dictates.

There have been eight exceptional stone tenders to date and 121 of these stones have been sold for US$305 million.

Although the Lesedi La Rona discovery was a significant milestone for the company, Lucara’s president and CEO William Lamb said the company remains focused on maintaining its production and excellent cost results to date.

“The recovery of the significant stones has not changed how the company operates or the areas in which we are currently mining,” he said. “We have started the process of increasing the top size of the plan again following the recoveries, but our focus remains on safety, production, costs and sales.”

Lucara Diamond has a number of capital projects underway and is testing some exploration licences this year, but the sale of Lesedi La Rona is a major project on its own.

“The development of a sales mechanism for this historic diamond is key in our ongoing strategy to develop the market further for the ultra high-value diamonds,” said Lamb. “In addition to this and coming on the back of this historic recovery, we have two capital projects on the mine, focused on maximizing the value per tonne treated by recovering the large diamonds as early as possible in the process.”

The diamond market has been under pressure for the last 18 months and even with the positive indications seen in the start of the year, Lucara Diamond is still cautious when considering the full diamond pipeline and the fundamentals that underpin the sector.

With zero debt and a population of large diamonds, which remain in high demand when compared to the smaller lower quality goods, the financials of the company continue to strengthen.

“We have, since the start of production, created a culture on site where cost focus is a priority,” said Lamb. “Just because the company has money, does not mean we need to spend it.

“Maintaining a healthy balance sheet while focusing on the areas within our control—like capital allocation and operating costs—we aim to maximize margins.”

Over the next three to five years, the short-term focus is the ongoing implementation of the XRT technology to recover large diamonds (up to 120 millimetre in size).

Exploration sample treatment through the bulk sample plant will continue for the next 12 months, with follow-up work as the results are finalized.

“In the longer term and specific to the mine site, we will be updating the resource with the plan to extend the indicated resource to below 600 metres,” said Lamb. “This will enable the completion of a pre-feasibility study focused on the potential to extend the life of mine by going underground.”

Sorting diamonds at the Karowe diamond mine — Photo courtesy Lucara Diamond

Karowe, which means precious stone in the local language, was completed in 2012 on time and within its US$120-million budget. Today, it generates more than US$230 million annually.

The mine produces approximately 400,000 carats of gem-quality (including Type IIa) diamonds annually, which are sold throughout the year through regularly scheduled tenders.

Lucara Diamonds remains on the look out for acquisition and joint-venture options within the diamond sector.

Sale of the Lesedi La Rona diamond

Lucara Diamond Corporation will release its 1,109-carat Lesedi La Rona diamond to Sotheby’s London on June 29, where it will be auctioned to the highest bidder. The diamond, the second largest to ever be recovered, has a pre-sale estimate price of $70 million—a relatively conservative number given Lucara’s recent $63.1 million sale of its 812.77-carat stone, The Constellation. The move to publically auction a diamond of this size and calibre is unusual, but given the amount of media attention to the find, Sotheby’s is expected to deliver superior marketing prowess and access to potential buyers.

Lucara Diamond Corporation will release its 1,109-carat Lesedi La Rona diamond to Sotheby’s London on June 29, where it will be auctioned to the highest bidder. The diamond, the second largest to ever be recovered, has a pre-sale estimate price of $70 million—a relatively conservative number given Lucara’s recent $63.1 million sale of its 812.77-carat stone, The Constellation. The move to publically auction a diamond of this size and calibre is unusual, but given the amount of media attention to the find, Sotheby’s is expected to deliver superior marketing prowess and access to potential buyers.