Gem Diamonds Posts Decline in Diamonds Sold From Letseng

(IDEX Online News) – Gem Diamonds sold 4 percent fewer diamonds from the Letšeng mine in Lesotho on the year at 47,065 carats in the first half of 2013.

Sales amounted to $81.9 million in the period – down from $82.6 million a year before.

The average price per carat was $1,741 for the first five tenders of 2013 from $1,690 a year before.

The firm said that nine rough diamonds achieved a value of more than $1 million each, and 44 rough diamonds achieved prices greater than $20,000 per carat.

A total of 252 rough diamonds greater than 10.8 carats in size were recovered, equating to 67 percent of Letseng’s revenue for the period.

Following the half-year period, a tender in July achieved an average price per carat of $2,202.

Three diamonds over 100 carats in size were recovered during the period: a 164-carat white diamond which was sold for $9 million into a partnership arrangement, a 103-carat yellow diamond which was sold for $810,000, and a 100-carat white diamond which was sold for $6.45 million in July.

The company had $61.5 million cash as of June 30, of which $ 54.6 million is attributable to Gem Diamonds.

Gem Diamonds’ CEO, Clifford Elphick commented: “Letšeng continues to demonstrate that it is a high quality mine following the recovery of three diamonds weighing in excess of 100 carats each. We are now focused on moving mining operations to the higher value, higher grade satellite pipe, which should positively impact revenues during H2 2013.

"The secondary and tertiary cone crushers have now been installed and are expected to reduce diamond breakage and we continue to evaluate other low cost initiatives focused on realizing additional value from our Letšeng mine through Project Kholo Optimised.”

The company said that 2013 started positively for the rough diamond market. "Rough prices benefitted from improved polished trading conditions after reasonable end of year holiday season sales and expectations that rough diamond supply would reduce in the short term."

Gem Diamonds owns 70 percent of Letseng Diamonds (Pty) Ltd in partnership with the government of the Kingdom of Lesotho which owns the remaining 30 percent.