Lucapa Diamond Company - Voluntary Administration

Lucapa Diamond Company (ASX:LOM), the owner of the Merlin diamond mine in the Northern Territory, entered voluntary administration on 22 May, with Paul Pracilio and Richard Tucker of KordaMentha appointed as administrators.

Perth-based Lucapa bought the Merlin diamond mine in 2021 for $8.5 million, but has struggled as the market for natural diamonds has plummeted amid competition from lab-grown diamonds and the post-COVID decline in discretionary spending on luxury items.

The company reportedly produced Australia's largest rough diamond at 104 carats, demonstrating that the mine does have production.

The administrators are undertaking an urgent assessment of the company and its operations ahead of a dual-track recapitalisation and sale process.