The biggest diamond to be discovered in more than a century has left Dubai to visit four more cities before being auctioned by Sotheby’s.
A discrete gathering was held at The Armani Hotel in Dubai on Tuesday, where Lesedi La Rona, or “The Lady”, as it’s known to members of the company that discovered it, was on display.
Its stop in Dubai was part of a global tour during which it has already visited Singapore and Hong Kong. It is due to visit four more cities before ending up at an auction at Sotheby’s.
Details of its next destination are being kept a secret, though, and William Lamb, the chief executive of Lucara Diamond, said he did not know how long the stone had been in the UAE.
The one thing he could say was that at 10am on Wednesday, it was being shipped out again. Secrecy over its movements is understandable.
“On a volume-for-value basis, we believe it’s the most valuable item on the planet. The thing that makes it even more challenging is it is rough. If there was any threat and the stone was taken, once it’s polished, it’s gone.”
Lesedi La Rona was discovered at the Karowe mine in Botswana last November. It was 1,111 carats (ct) when discovered, but after polishing is now ct1,109.
The following day, a ct813 stone – originally part of the same stone – was also discovered.
These are the biggest finds at Karowe, but are part of a string of high-value stones extracted from the mine.
Mr Lamb said that Karowe produces 0.48 per cent of the world’s diamond capacity, but more than 50 per cent of stones of more than ct100.
Yet for Canada-based Lucara there is a hint of good fortune about how it became Karowe’s sole owner.
The licence for the AK6 project, as it was known before it was commissioned, had been jointly held by African Diamonds and De Beers until Mr Lamb received a tip-off that De Beers was ready to walk away from the project due to viability concerns. Lucara paid $42m (Dh154m) for its 70 per cent stake, believing it could mine more efficiently, and when African Diamonds could not raise the money to continue after a feasibility study was completed, it bought the remaining 30 per cent a year later.
Mr Lamb said that Lucara has introduced a range of new techniques at the mine, including using carbon detection (rather than nitrogen) to recover stones more efficiently. It also changed production methods to protect bigger stones just four months before Lesedi La Rona was discovered.
Results from Karowe have been spectacular. From a loss-making start, where it was only receiving $210 per carat (its financial model required $276-$300 to be profitable), the Type IIA pure white stones produced at the mine are now fetching more than $380 per carat. Lucara has also sold 113 “large and exceptional stones” through a series of auctions for an additional $40m.
The world is now watching to see how much Lesedi La Rona, which means “Our Light” in Setswane, fetches when it comes up for auction in June, with analysts’ estimates ranging between $40m and $80m. Geordie Mark, a research analyst at Vancouver-based Haywood Securities, estimated in a recent research note that Lesedi La Rona and the ct813 stone discovered alongside it are likely to fetch a combined $120m. When the company’s shares were trading at C$2.56 (Dh7.46) per share in mid-March, he increased his target price on the stock to C$3.40, maintaining a buy rating. By close of business last Wednesday, the shares had reached C$3.19.
He said that the mine has been operating at a high margin (operating profit margins were 78 per cent in 2015).
“Recovery of exceptional stones at Karowe appears to be common practice.”
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