Gem Diamonds Posts Rise in Output From Letseng in Q4
January 28, 14
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The Letšeng mine achieved revenue of $75.6 million in the fourth quarter, with an average value of $2,533 per carat achieved in the quarter compared with $2,022 per carat in the previous quarter.
Gem Diamonds reported that 11 rough diamonds achieved a value in excess of $1 million each during the quarter, and 27 for the full year. Meanwhile, 35 rough diamonds achieved a value in excess of $20,000 per carat during the fourth quarter, with 96 for the full year.
A total of 215 rough diamonds greater than 10.8 carats in size were exported in the fourth quarter, equating to 82 percent of Letšeng’s revenue for the period, and 566 diamonds greater than 10.8 carats were exported for the full year, totaling 75 percent of Letšeng’s revenue for the full year).
During the quarter, total dividends declared by Letšeng were $ 20.0 million, which resulted in a net cash flow of $12.6 million to Gem Diamonds and payments to the government of Lesotho’s portion of the dividend of $ 6.0 million.
Gem Diamonds’ CEO, Clifford Elphick commented: "It is pleasing to see the stronger Letšeng diamond prices achieved for the period which were 25 percent up on the prior quarter. As mining at Letšeng has moved more into the Satellite pipe in Q4, we have seen an expected improvement on the quality of diamonds produced. This, together with a strong market saw the final tender of 2013 realize over $ 3,000 per carat. This firmer trend in rough prices for Letšeng’s high value diamonds looks set to continue into the beginning of 2014."
Commenting on the diamond market, Elphick said the industry "again relied on the US as the main centre for the sale of polished diamonds through the December holiday period. Although the holiday sales were ahead of last December much of the increased sales was attributed to heavy discounting and aggressive sales promotions.
"Ahead of the Chinese New Year, market focus has now shifted to the Asian market. The demand for rough diamonds remained healthy during the period, with relatively high prices achieved for Letšeng’s production, in particular the high quality large rough diamonds. Although positive sentiment is expected to continue into the first quarter of 2014, sustained liquidity constraints, made worse by two major banks in Belgium recently announcing the tightening of their lending criteria, are expected to result in the continuation of the cautious approach adopted by most industry participants in both the rough and polished market."