Petra Diamonds shares jump on 425-carat discovery at Cullinan

Shares in Petra Diamonds (LON:PDL) jumped more than 8% on Friday after the miner announced it had dug up a 425.1 carat, D-colour, Type II gem quality diamond at its iconic Cullinan mine in South Africa.

The discovery comes less than a month after Petra found a 100.83 carat gem-quality white diamond at the same mine, source of the world’s biggest-ever diamond, which was unearthed in 1905.

The company, which appointed last month former gold miner Richard Duffy as chief executive, said both recoveries demonstrated the frequency of such large stones at Cullinan.

The stock climbed on the news, trading 8.3% higher in London at 19.60p by 12:32 p.m. local time.

Petra, which has been seeking to turn around its fortunes after piling up debt to expand the operation, plans to sell the 425.1 carat diamond during the June quarter.

Diamond miners are struggling across the board, especially those producing cheaper and smaller stones where there is too much supply. In December, some of Rio Tinto’s (LON, ASX: RIO) customers refused to buy cheaper diamonds, while De Beers has been forced to cut prices and offer concessions to buyers.

This week, Africa-focused Firestone Diamonds (LON:FDI) put plans to extend the life of its 75%-owned Liqhobong mine in Lesotho on the back burner, saying that current market conditions don’t support the project.