198 carat diamond found in Lesotho
Gem Diamonds says the diamond is expected to fetch an 'exceptional price' when sold this year.
JOHANNESBURG - Gem Diamonds Ltd said it has recovered a 198-carat white diamond from its flagship mine in Lesotho that should fetch "an exceptional price" when sold this year.
The company's shares rose more than seven percent to rank among the top gainers on the London Stock Exchange on Tuesday.
Gem Diamonds recovered the type IIa diamond from its Letseng mine at the end of July. The company said the diamond displays no fluorescence.
The Letseng mine, in the Maluti mountains of Lesotho, is known for its large white diamonds. Since Gem Diamonds acquired a 70 percent stake in 2006, the mine has unearthed four of the 20 largest white gem-quality diamonds ever recorded.
The government of Lesotho owns the other 30 percent.
"The recovery of this large, high-quality white diamond continues to support the Letseng mine's reputation as the most important source of exceptional quality, large diamonds," Gem Diamonds Chief Executive Clifford Elphick said in a statement.
Analysts at Panmure Gordon said the diamond could be sold for "in excess of $10 million and possibly as much as $15 million", based on the price of similar stones from Letseng sold since 2010.
At a tender in February, Gem Diamonds sold a 162.02-carat diamond for $11.1 million and a 161.31-carat stone for $2.4 million. Both diamonds were recovered from Letseng in January.
"On that basis, a 198-carat diamond would be in the range of $2.9 million to $13 million," analysts at Numis wrote in a note, adding that the price would depend on colour, clarity and expected polished yield.
"Either way, (it's) another nice cherry plucked from the Letseng cake," they wrote.
Gem Diamonds, which is also developing a mine in Botswana, reported revenue of $212.8 million in 2013.