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Lucara Sells World’s Largest Uncut Rough Diamond for $53 Million
The 1,111-carat Lesedi La Rona is roughly the size of a tennis ball and was bought this week by diamond dealer Graff Diamonds.
Vancouver-based Lucara Diamond (TSX:LUC) has sold the world’s largest uncut rough diamond for $53 million, the company said on Monday (September 25).
The Lesedi La Rona, which means “our light” in Botswana’s Tswana language, is roughly the size of a tennis ball and was bought by diamond dealer Graff Diamonds.
The 1,111-carat stone will “dictate how it wants to be cut, and we will take the utmost care to respect its exceptional properties,” Laurence Graff, founder of Graff Diamonds, said in a statement.
The gem has been certified as being of “exceptional quality and transparency” by the Gemological Institute of America. It is the second-largest diamond ever discovered, with the largest being the 3,106-carat Cullinan diamond found in South Africa in 1905.
David Bennet, chairman of Sotheby’s jewelry division in Switzerland, called the find the “discovery of a lifetime” shortly after it was unearthed at Lucara’s Botswana-based Karowe mine in November 2015.
“Not only is the rough superlative in size and quality, but no rough even remotely of this scale has ever been offered before at public auction,” said Bennet.
The diamond was offered at auction in June 2016, but bids failed to meet the reserve price and the gem was not sold. Lucara CEO William Lamb has called the price paid by Graff Diamonds “an improvement on the highest bid” received at the time.
“Every potential buyer in the world was aware that [Lesedi La Rona] was for sale, so I think $53 million reflects the true market price,” independent diamond analyst Paul Zimnisky said via email.
“It was important for Lucara to not wait any longer — there are time value of money costs associated with continuing to hold an asset like that, and now that they have completed a plant upgrade, the likelihood of recovering other, potentially similar massive stones has increased,” he added.
BMO analysts said in a note that the price was 29 percent below their expected target price of $75 million. “However, the sale clears the decks and further improves Lucara’s financial position from the $63M cash at the end of June,” the analysts added.
After the announcement, Lucara’s share price was up 5 percent, trading at C$2.42 as of 2:00 p.m. EST on Tuesday (September 26). The company’s share price has lost more than 19 percent since the beginning of the year.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.