The Lucapa Diamond Co Ltd (ASX: LOM) share price is up 9% to 16 cents today after the diamond miner announced it has discovered a 126 carat diamond at its Mothae mine in the African Kingdom of Mesotho.
"We are delighted to have recovered our first +100 carat stone so early in our commercial mining campaign at Mothae, along with other rare Type IIa and fancy coloured gems, and look forward to unlocking the true value of this mine over the next decade and beyond," said Stephen Wetherall, Lucapa's CEO.
Lucapa also has a diamond mining tenement in the neighbouring west African country of Angola where it reported discovering a 130 carat diamond at its Lulo Diamond Project on May 16.
These kind of reports of mining companies discovering giant diamonds in exotic African locations often attract investors looking to get rich quick on the back of huge profits. However, it's very rare for them to work out that way.
For the quarter ending March 31 2019 Lucapa took in US$2.2 million in revenue to post an operating cash loss of US$2.7 million, with staff and production costs at US$1.4 million and US$2.1 million respectively. It had cash on hand of US$7.09 million as at quarter end.
Looking at the balance sheet and cash flows then I'm not a buyer of Lucapa shares for any number of reasons.
However, I wouldn't be surprised if it's a popular stock with the spec punters of the ASX.
