Lucapa Diamond Company, the ASX-listed miner with operations in Angola and Australia, is set to be acquired by Dubai-based Gaston International, a subsidiary of Jemora Group. The proposed A$15 million (US$10 million) deal follows Lucapa’s entry into administration in May.
Creditor Approval Sought for Acquisition
The administrators, KordaMentha, have signed a deed of company arrangement with Gaston International. The plan includes full repayment of creditors and a partial return to shareholders. It remains subject to creditor and court approval, with a vote scheduled for 20 August.
Lucapa entered administration following a downturn in natural diamond prices, increased competition from laboratory-grown diamonds, and operational setbacks.
Lulo Mine in Angola
Lucapa owns a 40 percent interest in the Lulo alluvial diamond mine in Angola, alongside Endiama and Rosas & Petalas. Since production began in 2015, Lulo has yielded a number of large stones, including the 404-carat 4 de Fevereiro and the 170-carat Lulo Rose. According to Gaston, Lulo achieved an average price of US$2,806 per carat in 2021.
The mine has two processing plants and remaining estimated resources of around 249,000 carats.
Lucapa also has a stake in an associated kimberlite exploration project at Lulo, where sampling has confirmed the presence of diamonds similar to those already recovered from the mine.
Australian Projects Included
The deal includes Lucapa’s interests in Australia, including the Merlin diamond project in the Northern Territory and the Brooking project in Western Australia.
Merlin is known for producing white, yellow, pink and blue stones, and historically yielded a high proportion of gem-quality diamonds. It was also the site of Australia’s largest recorded diamond discovery.
“We are going to look at the next phase of feasibility, which was stopped after the tariff regime came on,” said Dev Shetty, CEO of Jemora Group. “Merlin still has a way to go as far as full-scale production.”
Sector Implications
Lucapa had previously sold its interest in the Mothae mine in Lesotho and was left with Lulo as its only revenue-generating asset. Attempts to raise funds or sell a stake in Merlin were unsuccessful.
Gaston’s acquisition of Lucapa follows other recent moves by Jemora in the resource sector. The group also operates Jemora Gemhouse, which trades coloured gemstones.
Dev Shetty said: “Even in the current diamond environment, Lulo has remained relatively unaffected due to its scale and output of larger stones. There continues to be demand for high-quality diamonds.”
For jewellers, the transaction places two sources of large and higher-value natural diamonds under new ownership. Continued development at Lulo and Merlin may impact availability and sourcing of natural stones, particularly in the upper end of the market.
