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Shares of Lucara Diamond Corp. of Vancouver nosedived on Wednesday after the giant gemstone it discovered last year failed to sell at a London auction.
The top bid of $61-million (U.S.) fell short of Lucara’s minimum selling price for its historic discovery. Slightly smaller than a tennis ball, the 1,109-carat stone is the largest diamond unearthed in more than a century.
Lucara’s shares plunged as much as 17 per cent in the hours after the auction and finished the day down 14.5 per cent. The stock had doubled in price over the past year as Lucara produced a stream of supersized diamonds from its Karowe mine in Botswana.
It named the biggest of its discoveries Lesedi La Rona, which means “our light” in the Tswana language of southern Africa. Sotheby’s, the auction house, had predicted that the stone could fetch $70-million when it went up for bids on Wednesday.
Instead, bids fell short of Lucara’s so-called reserve price – the lowest price it would accept for the stone – and the company announced that it would retain its prize find. “People think I must be really upset,” William Lamb, chief executive officer of Lucara, said in an interview. “But I’m really not.”
Mr. Lamb emphasized that it is not typical practice in the diamond industry to sell uncut stones through a fine-art auction house like Sotheby’s.
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