Lucara Falls as Gem Auction Disappoints: Vancouver Mover
Lucara Diamond Corp. (LUC), a Vancouver- based gem miner with assets in Africa, fell the most in more than three years after the company sold diamonds in an auction for less than expected by some analysts.
Lucara plunged 19 percent to 81 Canadian cents a share in Toronto, the biggest decline since Dec. 23, 2008. Lucara shares have declined 5.8 percent this year through yesterday.
The diamond miner sold 26,196 carats in its first auction of diamond output from its Karowe mine in Botswana for an average of $215 per carat, Lucara said today in a statement.
“The market was really looking for a better diamond price,” Edward Sterck, a London-based analyst at BMO Capital Markets, said today in a telephone interview. Analysts expected a price of about $300 a carat, he said.
“Buyers may have been cautious about what is new production from an unknown source,” Sterck said today. “They may want to get a better understanding of how they go through cutting and processing.”
Lucara Chief Executive Officer William Lamb said the results of the auction, in which not all diamonds offered in were sold, were a “direct reflection of the current status of global markets.”
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