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Lucapa has just raised $16.5 million to go after one of Australia's most promising diamond prospects

Business Insider Australia logo Business Insider Australia 9/04/2018 Chris Pash


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The Perth-based Lucapa Diamond Company has just raised $16.5 million from a new cornerstone investor and existing shareholders to fund follow-up exploration of one of Australia's most promising diamond prospects.

The Perth-based Lucapa in January announced 119 diamonds had been recovered from 86.8kg of samples from just one of 18 holes drilled at its Little Spring Creek prospect in Western Australia’s West Kimberley.

The discovery, described as exceptional by analysts and considered to be the best find in decades in Australia, is about 50km from the old Ellendale mine which in the past produced about half the world’s valuable yellow diamonds.

Today Lucapa says the capital raising, at the prevailing market closing price of 23 cents a share, enables the company to launch an aggressive fully-funded drilling and exploration program without diluting its 80% interest in the project.

In early trade today, Lucapa shares were up 6.5% to $0.245.

The exploration program will include drilling at the Little Spring Creek discovery, a second geophysical target about 350 metres to the north-east, and other areas of interest.

The target areas:

a close up of a map © Provided by Business Insider Inc

Lucapa will undertake extensive geophysical surveys, including airborne and ground penetrating radar, to better define the target at Little Spring Creek.

Drilling is expected to resume in May.

The diamonds discovered from the one drilling hole:

a close up of a white wall © Provided by Business Insider Inc

Stephen Wetherall, Lucapa’s CEO, told Business Insider that the quality of the diamonds was a surprise.

“They certainly have a high proportion of white colours and there is a smattering of fancy yellows," he says. "I don’t have to excite you about fancy yellows with Australia being the biggest producer of fancy yellows when the Ellendale mine was in operation.'

Lucapa is also on the hunt for further capital. The company announced the appointment of Perth-based Euroz Securities Limited to target increased institutional and large fund interest. Euroz acted as lead manager and bookrunner to the latest placement.

The identity of the new cornerstone investor hasn't been revealed but Lucapa says it has significant global resource development experience.

The latest funds will also enable Lucapa to be a first mover in Angola as the new Angolan President seeks to attract more foreign direct investment.

The company say the funds will also provide a working capital buffer for the high-value Mothae diamond mine development and early bulk sampling program in Lesotho.

Lucapa has been uncovering large diamonds in Angola. The largest recovered was a 404 carat stone at the Lulo Diamond Project, the biggest diamond ever unearthed in Angola.

The diamond was the 27th biggest recorded in the world and the biggest discovered by an Australian company.

The company has been averaging a return of more than $US1000 per carat, with the latest sale pulling in $US1,731, making its Lulo Diamond Project in Angola the highest US dollar per carat alluvial diamond producer in the world.

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