Beleaguered diamond miner Petra Diamonds found a huge stone at its Cullinan mine in South Africa, where the biggest-ever diamond was found more than a century ago. Petra said Friday it recovered a 425-carat white color Type II stone.
It’s a welcome find for the company which has been weighed down by too much debt and growing concerns that it wasn’t finding enough expensive stones. Just a handful of big finds can change the economics of some gem mines.
The company’s iconic Cullinan mine, once called the Premier Mine, has been operating since 1902 after a brickwork owner discovered diamonds on a farmer’s land outside of Johannesburg. Just three years later, the 3 106-carat Cullinan diamond was dug from the new mine. It was cut into several polished gems, the two largest of which – the Great Star of Africa and the Lesser Star of Africa – are set in the Crown Jewels of Britain.
Today’s discovery sent the shares up as much as 7.7%, rebounding from a 16-year low. In the second half of last year, prices achieved at Cullinan slumped 31% from a year earlier to just $96 a carat, casting doubt on its ability to find big stones despite racking up millions in debt upgrading the mine.