March 18 (Bloomberg) -- Lucara Diamond Corp., a Canadian gem miner with assets in southern Africa, jumped the most in five months after reporting the finding a 239.2-carat stone from its Karowe mine in Botswana.
The shares rose 9.3 percent to 59 Canadian cents in Toronto, the biggest gain since Oct. 10.
The stone measures about 5 centimeters (2 inches) by 2.5 centimeters by 1.5 centimeters, Vancouver-based Lucara’s Chief Executive Officer William Lamb said today by phone. That’s roughly the size of a household 9-volt battery. Large diamonds are valuable because of their rarity, Lamb said.
“There will always be a market for it because people who have way more money than we have are looking for things which are exceptional and that nobody else is going to have,” he said. Lamb said it’s too early to speculate on what it may be worth.
The diamond may sell for $10 million to $15 million, Edward Sterck, a London-based analyst at BMO Capital Markets, said today in a note. Sterck says his estimate assumes the diamond is similar in quality to a 236-carat stone discovered by De Beers. A 101.7-carat gem cut from that rough diamond is due to be auctioned by Christie’s International.
The stone will be analyzed and valued before Lucara sells the rough stone, probably as part of its tender that closes May 13. The proceeds of the sale will give Lucara more flexibility in its operations, Lamb said.
Lucara recovered two other large stones from Kurowe, one weighing 124 carats and the other 71.1 carats. The three diamonds may yield total revenue of about $12.5 million based on conservative estimates, resulting in a boost of about 50 percent to Lucara’s estimated 2013 earnings, BMO’s Sterck said.
To contact the reporter on this story: Liezel Hill in Toronto at firstname.lastname@example.org
To contact the editor responsible for this story: Simon Casey at email@example.com