Change of tact: No auction

SHARE   |   Monday, 15 August 2016   |   By Kabelo Adamson
William Lamb, President and CEO  of Lucara Diamond Corp William Lamb, President and CEO of Lucara Diamond Corp

William Lamb, President and CEO of Lucara Diamond Corp which unearthed the second largest diamond ever last summer this week ruled out the possibility of selling Lesedi La Rona – a diamond nearly a size of tennis ball – through an auction again. Speaking in an interview on Wednesday shortly after handing over a cheque of over P2 million to some local charitable organisations, Lamb said it is improbable that they will go the same route again of selling the exceptional stone, but nonetheless he points out that he does not regret attempting to sell “Our Light” through an auction. There is no indication of frustration on Lamb’s face arising from the failed auction of the second largest diamond; in fact he is all smiles as he talks about the ‘find of a lifetime’. Brandishing a shiny object from his hand which he is quick to explain that it is the model of the now famous diamond – same size and shape, Lamb is optimistic they will soon a find a buyer as interest is still flowing in and the company is currently considering other options of selling the diamond. “Just this morning I received three emails from the guys inquiring about the diamond,” said Lamb, adding that the company is not looking for anything less than $68 million as a minimum price to sell the diamond in whichever way the company may decide is a good method.

Lucara attempted to sell the 1,109 carat stone through an auction at Sotheby’s in London in June but bidders could not surpass, let alone meet the reserve price, forcing Lucara to retain the diamond in its inventory. The auction came after Lucara took the diamond on a roadshow to places such as Singapore and New York. Prior to the auction of the diamond, Lucara sold a massive 813 carat diamond named ‘Constellation’ for a record $63 million which was also unearthed at Karowe Mine near Orapa and expectations were that Lesedi La Rona will fetch far much better than that, with predictions going as far as $90 million. Lamb said the auction was good thing in as far as it exposed the company to information that could help it analyse on how best it could sell diamonds of Lesedi La Rona’s size in the future. But as it stands, it is not clear when the diamond would be sold as according to Lamb, options of selling are still being weighed. His wish though is to see the stone out of the box and gone before the end of 2016. “The diamond recovered was the second largest to be ever recovered and before that no person on earth today has ever seen a diamond that size. We are holding a higher value diamond for the benefit of the shareholders mostly the people of Botswana,” said Lamb.

The biggest diamond discovered in history is the 3, 106 carat Cullinan discovered near Pretoria in South Africa and has been cut into the British Crown Jewels.
Through the auction, Lucara was targeting wealthy buyers who could buy the diamond as it is but would now have to consider other methods including the one through which the Constellation was sold. “One of the options we are looking at is the same as for the Constellation.” Lucara, a Canadian miner headquartered in Vancouver, also sells its stones through tenders and it might be one of the possibilities that the cash-rich company might look into or as Lamb said this week, either privately.

Lamb said there are people who have set a campaign to devalue the diamond through trash talking it which is aimed at lessening its value so that it can be sold at cheaper price, but he is not bothered by those. “People know the value that this diamond would yield.” To preserve the value of the diamond, Lucara has gone to extreme ends by deciding not to mine in the area where Lesedi la Rona was unearthed. Lamb said this could result in removal of other massive stones that could end up diminishing the value of the 1,109 carat stone and the intention is sell it off first before going back to the area.

Brexit impact on the auction
With the auction of the stone happening in the same week as the referendum which was to determine the position of the UK in the European Union (in fact a day before the poll), one of the logical excuses would be that the event could have negatively impacted on the auction. But Lamb has downplayed the impact of the referendum on the auction. “The people that we were targeting are those with financial resources and probably have money in other bank accounts and would not have been worried about the whole Brexit thing.”

Karowe Mine
Lucara acquired this mine from De Beers and Lamb is not short of praise for it. “It is the most phenomenal asset that we’ve ever acquired. Production is going very well and the guys here have really hit strides to extract value from the mine.” Lamb said investment by Lucara in top notch technology at Karowe mine - situated on the AK6 kimberlite – has helped them to retrieve high-value stones from the mine which was considered small and low grade by previous owners.
Lamb said they are now at the forefront in terms of diamond discovery using some of the most sophisticated technologies of the present day. Open pit operations at the mine are accepted to continue until 2026 with a further underground potential and currently delivers between 350,000 to 380,000 carats per year. And this year the company forecasts revenue to be between $200 and $220 million, excluding the sale of the two very large diamonds - Constellation and Lesedi La Rona - which were recovered in quick succession last November.