With the US and much of Canada out on holiday on Monday, little news hit the market. But over in Australia at least one company picked up some of the slack. Lucapa Diamond Company (ASX:LOM) said it’s recovered a 404.2-carat diamond from its Angola-based Lulo project.
Lucapa has already recovered three other gems of over 100 carats at Lulo, but Monday’s is by far the largest — the runner up, recovered earlier this year, measures just 133.4 carats. What’s more, Monday’s stone is also the largest diamond ever recovered by an Australian company, and has already been confirmed as a Type II, D-color stone.
However, perhaps most impressive is the fact that the gem is the largest diamond ever found in Angola, and the 27th-biggest diamond in the world. According to Lucapa, until now the largest diamond found in Angola was the 217.4-carat Angolan Star, which was recovered in 2007 from the Luarica mine.
Aside from the size of the gem, Lucapa’s discovery is interesting in that it places the spotlight on Angola. Though the African country was the world’s fourth-largest producer of gem-quality diamonds in 2014, it’s often overshadowed by Botswana. Also located in Africa, Botswana was the largest producer of gem-quality diamonds in 2014, with the value of its output coming in at US$17.3 million, far surpassing Angola’s US$7.1 million.
Angola’s reputation as a major diamond producer has also been marred in the past by its connection to blood diamonds. As recently as last year, the country was dealing with the repercussions of a book that “revealed killings and torture in the country’s diamond fields.” However, it’s clear that the country is looking to shed that image.
Case in point: Lucapa is partnered on Lulo with Angolan national diamond company Endiama, as well as Rosas & Petalas, and Antonio Carlos Sumbula of Endiama was adamant on Monday that Angola would like to deliver more discoveries like the one just announced. “The Lulo diamond field is an example of what we would like to showcase to the world to encourage international investment in Angola’s diamond mining industry,” he said.
For his part, Stephen Wetherall, chief executive of Lucapa, certainly seems to believe that Lulo will be able to offer more of the same. He commented Monday, “[w]e have always emphasised the very special nature of the Lulo diamond field and this recovery — together with the other 100 carat-plus diamonds recovered this year alone — is further evidence of that.”
He added, “[a]nd while we continue mining these exceptional alluvial gems from Mining Blocks 6 and 8 at Lulo, we are also continuing to advance our systematic exploration program to find the kimberlite source of these diamonds.”
Unsurprisingly, investors are also pleased about the news, with their enthusiasm sending the company’s share price rocketing upward. Directly after the news was released, Lucapa’s share price leaped to AU$0.45, up 40.625 percent from Friday’s close. Since then it’s declined, but was still at an impressive AU$0.41 at close of day Monday.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.