Lucapa’s diamond journey

Lucapa expects up to 90 per cent of its product to be sold as high-end jewellery.

Ewen Hosie speaks to Lucapa Diamond’s Stephen Wetherall about the company’s ambitious Brooking diamond venture in Western Australia.

Lucapa Diamond Company made headlines in August when it returned 1100 diamonds from a single 178kg sample of lamproite core at its Brooking exploration project in Western Australia.

Brooking is in the Kimberley region about 50km from the Ellendale yellow diamond mine that closed in 2015, but is now set for a restart.

Lucapa’s recovery of the diamonds built on a smaller but still-promising recovery of 119 micro- and macro-diamonds from an 87kg core in January 2018.

Before this Australian venture, Lucapa’s success had been in the premium alluvial diamond market from recoveries at its Lulo project in Angola, central Africa.

The company holds the record for the largest diamond ever found in Angola, a 404.2-carat (ct) rough diamond discovered at the company’s flagship Lulo mine in February 2016.

Incidentally, the company holds second place on the list as well for a 227ct diamond discovered in February 2017.

Lucapa is also on the verge of a start to commissioning at the Mothae kimberlite project in Lesotho, as the majority owner of a 70–30 joint venture with the Lesotho Government.

The company has high hopes that Brooking, its first Australian project, has the potential to become a major diamond mine, filling a valuable gap in the high-end jewellery market with Rio Tinto’s Argyle mine expected to close in the coming years.

For Lucapa’s chief executive officer and managing director Stephen Wetherall, who has been with the company for four years, the excitement is palpable.

“We are embarking on our third drilling campaign [at Brooking] and plan to drill 11 other targets that we have identified,” he says.

“The fact that we have found one of those targets or lamproites to be diamondiferous certainly increases the likelihood of other diamondiferous lamproite being around as well.”

Lucapa’s work at Brooking started in earnest when it entered a commercial arrangement with junior explorer Leopold Diamond Company to acquire 80 per cent of the Brooking tenement area. The long-term goal, says Wetherall, is to mobilise a bulk sampling campaign to evaluate further macro diamond potential.

Lucapa hopes to complete a drilling campaign before the start of the wet season at the end of the year.

“We have conducted heritage surveys with our Aboriginal colleagues, are waiting on the final report and also have the program of works at the department already,” Wetherall explains.

“Once they have signed that we will get on the ground.”

The company has adapted to the costs and other factors involved in setting up a Western Australian mining project, which Wetherall says has higher costs as a mining jurisdiction than central Africa, but also has easier and quicker access to skill sets due to existing infrastructure.

Environmentally, he cites little difference between the two.

“We operate in middle Africa and it has a rainy season from October through to March or early April, which is similar to Kimberley. The temperatures in northern WA are probably a bit more hostile in terms of ultimate heat,” he explains.

“Where we are in Lesotho [at Mothae] its 3100m above sea level so in the winter we’ve got to deal with snow and have rain in the summer months. We capture the rain in our freshwater dams to allow us to process and treat material.

“If you look at Mothae, where we operate near ski resorts, we deal with snow there as well.”

Lucapa plans to bring its African success as a supplier of high-value gem diamonds to what Wetherall refers to as the “uberwealthy”, ultra-high net worth individuals who comprise the most profitable customer base in the global diamond market.

The company is well set to meet this demand, with its current output of low-value, industrial-grade boart diamonds sitting between just 1–3 per cent.

‘We are currently seeing very high demand for the high end and subdued demand for the low end,” he says.

“The diamond results that stand out above the rest are companies that have high-end production.

“Because our crystal ball is a bit murky when it comes to multiple sectors within the industry, we focus on staying in the more stable, large-end side and hope to offer consistent returns to our shareholders going forward.

“Where we operate in the emotional sector — large, high value stones — the people who are buying our product want to know it took three billion years to create our diamonds and that they have come from the depths of the earth.”

This article also appears in the November edition of Australian Mining.

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