Biggest Gem Found in a Century Finally Sells for $53 Million

Updated on
  • Graff pays $47,777 a carat after stone went unsold for a year
  • Gem fetched less than a smaller one Lucara found at same time

Guards stand next to the 1109-carat rough Lesedi La Rona diamond at Sotheby's in New York, on May 4, 2016.

Photographer: Spencer Platt/Getty Images

Size isn’t everything in the diamond market, especially for the biggest gem found in more than a century that took more than a year to sell.

Lucara Diamond Corp. finally sold the 1,109-carat Lesedi La Rona diamond for $53 million, or $47,777 a carat, on Monday to Graff Diamonds, Vancouver-based Lucara said in a statement. While it’s significantly bigger than the 813-carat Constellation stone Lucara found at the same time, that stone sold for a record $63 million, or about $77,500 a carat.

The fate of the Lesedi, or “our light” in the Tswana language spoken in Botswana, is a good example of how size isn’t the most important factor in the the diamond industry. The gem is more difficult to cut and the color isn’t as good as the Constellation, meaning it probably won’t yield as good a polished stone. BMO Capital Markets had forecast that the diamond, which went unsold at a Sotheby’s auction in London last year, could sell for $75 million.

“If you take the potential outcomes from the stone into consideration, the risk that the buyer is actually taking, you can now see why it wasn’t the easiest one to sell,” Lucara Chief Executive Officer William Lamb said in a phone interview.

Shares Climb

The sale “clears the decks” and improves the company’s financial position, BMO analyst Edward Sterck said Tuesday in a note. Lucara could flow funds to shareholders as a special dividend of about 10 Canadian cents a share following the sale, he said.

Lucara rose as much as 7.4 percent in Toronto, the biggest intraday gain since September 2016. The shares still have declined 19 percent this year.

The Lesedi, just smaller than a tennis ball, is second in size only to the Cullinan, a 3,106-carat gem found in South Africa in 1905. The Cullinan was cut to form the Great Star of Africa and the Lesser Star of Africa, which are set in the Crown Jewels of Britain.

In last year’s Sotherby’s auction, there was only one offer, which was lower than the amount paid by Graff. At the time, the auction house itself bid $61 million as it sought to move the stone closer toward the reserve price, which didn’t happen, Lamb said.

Lucara, known for producing some of the world’s biggest and best stones, unearthed the diamond at its Karowe mine in Botswana. Lamb said the proceeds from three diamonds -- the Lesedi, Constellation and a 373 carat chunk that broke of the Lesedi -- totaled more than $130 million, exceeding what it cost to build the mine in the first place.

The sale of the Lesedi also will free up more time for Lamb, who said in many ways the stone had been a distraction.

“Everyone seems to have forgotten about the mine on a day-to-day basis,” he said. “It’s taken a huge amount of time away from management.”

— With assistance by Joseph Richter

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