London-listed Petra Diamonds sold a rare blue diamond found at its mine in South Africa for $27.6 million, falling short of the price some analysts had expected it to fetch.
The company recovered the 122.52-carat diamond in June from its Cullinan mine, a site with a long and illustrious history of producing high-value stones.
Petra said the diamond was purchased by a partnership comprising itself and a polishing partner, who wished to remain anonymous.
The diamond miner, which has five mines in South Africa and one in Tanzania, will receive 85 per cent of the agreed sale value, or $23.5 million immediately and upon sale of the polished stone, Petra will receive 15 per cent of the proceeds.
"Whilst this is less than the $35 million-$40 million I had in my figures, given that the company does share in the upside it is not a disastrous number," Panmure Gordon analyst Alison Turner said.
“Coloured stones are particularly difficult to price given the intensity of the colour can lift the value by a factor of 10 times relative to an equivalent white,” Ms Turner said.
Petra shares were down 0.46 per cent at 195.5 pence in early trade on the London Stock Exchange on Tuesday.
Numis Securities analyst Cailey Barker said the price was slightly shy of his expectations.
“Petra is a part of the partnership buying the stone and it does make us question the robustness of the market for these super large diamonds going forward,” he said.
Blue diamonds are considered so rare that no official statistics exist about their recovery. The diamonds get their colour from small amounts of the chemical element boron trapped in the crystal carbon structure during their formation.
Since January, Petra has discovered three large diamonds - two of them blue - at Cullinan.
The mine, in the foothills of the Magaliesberg mountain range northeast of Pretoria, has been the source of many large diamonds, including the largest rough gem diamond ever recovered - the 3,106-carat Cullinan Diamond, found in 1905.
Revenue from these auctions could accelerate dividend payments and fund Petra’s capital expenditure as it looks to mine deeper to access undiluted and more valuable ore.
Reuters
