Lucapa Diamond Company collapses casting doubt on future of mine where Australia's most impressive jewell was found
A mine that produced Australia's largest ever diamond is set to be sold after its owner entered voluntary administration.
KordaMentha Restructuring have been appointed voluntary administrators for Perth-based diamond miners Lucapa Diamond Company Limited.
Businesses connected to Lucapa - Brooking Diamonds, Heartland Diamonds and Australian Natural Diamonds, are also in administration.
It could mean the Merlin diamond mine, about 720km south-east of Darwin, which Lucapa had planned to revive last year, is in doubt because the administrators said its sale was likely.
More than 500,000 carats of mostly gemstone-grade diamonds have been dug up at Merlin, including a 104-carat type 2a diamond which is the largest diamond that has been found in Australian history.
Lucapa bought the Merlin mine - one of only three diamond mines in Australia - in 2021 for $8.5million and planned to spend $25million to ensure the mine's future for a further five-years.
A 2021 a preliminary assessment of the mine identified potential revenues of $1.6billion, as well as a 2.1million carat production target over 14 years.
Lucapa managing director Stephen Wetherall said in 2021: 'The results of the scoping study confirm the great potential identified by Lucapa using an innovative hybrid open pit and vertical pit mining methodology to establish a mining operation at Merlin.'
'There is potential to deliver further significant value through the operational opportunities and from mineral resource extensions, underground development and exploration as the kimberlites continue at depth and there are a significant number of anomalies that have the potential to deliver new source discoveries,' he said.
In January, it was reported than Lucapa used modern exploration technology to obtain 'outstanding' results from a geophysical survey conducted at its Merlin diamond project.
Lucapa's initial review of the electromagnetic survey data found two large and highly conductive base metal targets.
The company's flagship asset is the Lulo mine, in Angola.
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