Lucara shares up on report of fourth diamond recovery north of 1,000 carats

Lucara Diamond (TSX: LUC; BSE: LUC) shares rose by more than 12% Wednesday after it reported pulling a 1,080 carat diamond from its Karowe diamond mine in Botswana. It’s the company’s fourth thousand-plus carat diamond discovered from the mine since 2015.

The stone, measuring 82.2 x 42.8 x 34.2 mm, is described as a type IIa top-white gem of high-quality, and was recovered from direct milling of ore sourced from the M/PK(S) unit of the south lobe.

The other three notable recoveries since 2015 include the 1,758 carat Sewelô (2019), a 1,174-carat diamond (2021), and the 1,109 carat Lesedi La Rona (2015).

Lucara CEO Eira Thomas said in a news release on Tuesday that this fourth large diamond might not be the last.

“As we progress mining deeper in the open pit and transition to underground mining, exclusively in the south lobe, the preponderance of large, high-value stones is increasing,” she said.

Thomas added that the discovery “underpins the strong economic rationale for investing in the underground expansion that will extend the mine life out to at least 2040.” 

BMO diamonds analyst Raj Ray said in a note on Wednesday that the discovery is positive and will improve the balance sheet for Lucara, after the company announced in July that preproduction costs for the Karowe underground mine expansion would increase to by 25% to US$683 million and underground production will be delayed to the first half of 2028. 

Ray noted that it was early to comment on the 1,080-carat stone’s realizable value because it hadn’t yet been scanned but he expects it could be worth more than US$10 million. 

“For context, the 1,109cts Lesedi La Rona recovered in 2015 was sold for US$53 million,” he said.

Lucara shares were up 12.1% to 41¢ at mid-day in Toronto on Wednesday, valuing the company at $188.6 million. Its shares traded in a 52-week window of 35¢ and 72¢.