Lucapa is about to kick off its much-anticipated WA diamond project

9th June 2018
Resources Rising Stars

One of the most anticipated exploration programs in recent times is about to kick off at Lucapa’s Brooking diamond project in Western Australia’s remote West Kimberley region (reports Barry FitzGerald on Stockhead).

The drilling campaign comes at a time of upheaval in the global diamond market caused by diamond king De Beers announcing it will begin producing lab-grown synthetic diamonds for a new fashion jewellery line — something it said it would never do.

More later on De Beer’s lab-grown diamonds — as distinct from natural diamonds formed in the bowels of the earth billions of years ago.

First up, the excitement building around Lucapa’s new drilling campaign at Brooking.

It was the Little Spring Creek prospect within the broader Brooking project area that generated excitement in January when Lucapa (ASX:LOM) reported results from the LSC-01 drill hole, completed just before the wet seasons closed in last year.

Lucapa reported it had recovered 119 diamonds from 86.8kg of core samples collected from the drill hole into the Little Spring Creek lamproite (the world’s number two source of diamonds after kimberlite).

To recover any diamonds from a 63mm diameter hole would have been exciting.

But to recover 119 of the sparklers — seven were macro-diamonds (more than 0.5mm in size), and 112 were micro-diamonds (less than 0.5mm) – took the excitement to another level, leaving the market itching for follow-up work in the 2018 dry season.

Any day now Lucapa is expected to confirm the first of a new 10-hole drilling program in to the Little Spring lamproite has started.

That will make for interesting times in the months ahead. Lucapa last traded at 28c for a market capitalisation of $126 million — the bulk of which reflects the company’s African diamond production interests.

Drill sites in the latest Brooking program have been selected based on geophysical survey data indicating that last year’s discovery hole – which intersected 70m of diamond-bearing lamproite from near surface — was drilled towards the south-east edge of the main geophysical signature.

A busy 2018 for African interests

While the market hangs out for first results from the Brooking drilling program, Lucapa’s African diamond production interests are also in for a busy 2018.

The search for the kimberlite source of high-value alluvial diamonds being produced at its Lulo operation in Angola (it’s where Lucapa recently recovered a 46 carat gem quality pink diamond now being held for later sale) is stepping up.

And the second-half of the year will see first production from a redeveloped and expanded Mothae kimberlite mine in Lesotho.

In company valuation terms, Mothae is important to Lucapa because unlike alluvial operations which can be difficult to model, it comes with a stock exchange-compliant diamond resource of more than 1 million carats (to a depth of 300m) at an average modelled value of $US1063 a carat in the rough.

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