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Petra Diamonds sells a 122.5 carat blue diamond for $27.6 million

by , 16 September 2014

In June, Petra Diamonds unearthed a massive blue diamond, weighing in at 122.5 carats, at its Cullinan mine near Pretoria.

When Petra Diamonds revealed the find, experts thought the diamond would bring in anything between $35 and $50 million.

Its sale price comes in well below these estimates.

Let's take a closer look at what's going on…

The blue diamond came from the infamous Cullinan mine

Earlier today, Petra Diamonds, which has a listing in London, said it “sold a rare blue diamond found at its mine in South Africa for $27.6 million,” reports Fin24. This is less than what some analysts “expected it to fetch”.

The diamond came from Petra Diamonds’ Cullinan mine, says IOL. This mine has “a long and illustrious history of producing high-value stones”.

The buyers of the rare blue diamond are “a beneficiation partnership,” notes Mining Weekly. This partnership includes Petra Diamonds, “which has a 15% share and a polishing partner, which wished to remain undisclosed”.

Petra Diamonds will get “85% of the agreed sale value, or $23.5 million, immediately and upon sale of the polished stone,” adds Fin24. With a 15% stake in the beneficiation partnership, Petra Diamonds “will receive 15% of the proceeds”.

The blue diamond sold for less than expected

An analyst at Panmure Gordon, Alison Turner, said that while this is less than her estimates, “given that the company does share in the upside, it is not a disastrous number,” says IOL. She says that coloured diamonds are hard to price, “given the intensity of the colour”.

Cailey Barker, an analyst with Numis Securities, said the price for the gem was slightly less that he envisaged, adds IOL. He added that “it does make us question the robustness of the market for these super large diamonds going forward”.

The CEO of Petra Diamonds, Johan Dippenaar, said the company was “pleased to have concluded this arrangement,” adds Mining Weekly.

There is scope for Petra Diamonds to earn slightly more on the diamond once the gem is cut, polished and sold on.

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Petra Diamonds sells a 122.5 carat blue diamond for $27.6 million
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