What's a diamond the size of a tennis ball worth? For miner Lucara Diamond Corp., about US$35 million and a fresh record for its shares. The Vancouver-based company's shares rallied after Sotheby's estimated the biggest diamond unearthed in over a century - a 1,109-carat gem-quality stone -- will fetch more than US$70 million at an auction scheduled for June 29. The diamond producer expects as much as 48 percent of the proceeds will find its way to the company's bottom line, Chief Executive Officer William Lamb said in an interview with Bloomberg News. "There's blue-sky potential," Lamb said in a telephone interview from New York on the potential sale price of the Lesedi La Rona diamond - "our light" in the Tswana language spoken in Botswana, where the stone was found last year. "You only need two people that desperately want it, and then you'll get a good price." Lamb said the company, whose profit in 2015 surged 35 percent to C$77.8 million, is weighing what to do with the proceeds, including a special dividend, share buyback or investments back into its mining operations, the CEO said. Shares of Vancouver-based Lucara rallied 8.4 percent to C$3.47 at 2:10 p.m. in Toronto, extending its gain in 2016 to 52 percent. The stock surged 30 percent on November 19, when it announced the discovery of the diamond, second in size only to the Cullinan diamond cut into the Great Star of Africa gem in the British Crown jewels.
No rough even remotely of this scale has ever been offered before at public auction.While Lamb estimates Lucara could have a diamond of about 400 carats cut and polished from the rough diamond, he said the company decided there was less risk and more immediate value to shareholders from selling it in its rough form. "Nobody knows what a 400-carat diamond is worth," he said. Sotheby's said it set the estimated sales price using "independent reports on the potential yield." Proceeds from the diamond's auction will be split between the auctioneer, taxes and royalties to the Botswana government, and Lucara, Lamb said. A Sotheby's spokesman said financial details are confidential. "No rough even remotely of this scale has ever been offered before at public auction," David Bennett, worldwide Chairman of Sotheby's Jewellery division, said in the release.