African Diamonds talks up rare gem valuation

IRISH-LISTED exploration group African Diamonds said yesterday that the valuation of its AK6 diamond discovery in Botswana could be greater than previously reported.

The company, which last month confirmed it had brokered a deal to buy out De Beers’s 71 per cent stake in the project, also announced plans to offset the cost of running the AK6 mine.

African Diamonds said the valuation methods of AK6 diamonds used by De Beers valued broken stones as broken diamonds and downplayed the impact of the rare type II diamonds contained in the South Lobe of AK6. A full evaluation of all diamonds recovered would be completed in early 2010.

Type II diamonds contain little or no nitrogen so they tend to be pure, colourless, class D, E or F colour diamonds.

A 2008 Letseng type II stone of 478 carats sold for $38,500 a carat, while a recent Sotheby’s auction saw a 29.53 carat D colour type II cut diamond sold for $118,000 a carat.

“The impact of the beautiful, rare type II diamonds on values should not be underestimated. Less than 1 per cent of the world’s diamonds are type II.

“Estimates suggest up to 15 per cent of the diamonds in the South Lobe are type II,” said African Diamonds chairman John Teeling. “If this is true, it will be the highest ever mined.”