Gem Diamonds Reports 'Exceptional' Half-Yr Performance
July 29, 14
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At the Letšeng mine, there was an 80 percent increase on a year earlier in revenue to $147.8 million, and a 29 percent increase to 54,678 in carats recovered.
There was a 14 percent rise to 53,799 in carats sold in the first five tenders of 2014, with a 58 percent increase in average value per carat to $2,747.
The miner said that 37 rough diamonds achieved a value in excess of $1 million each, and 77 rough diamonds achieved a value in excess of $20,000 per carat, while five rough diamonds achieved a value in excess of $60,000 per carat.
A total of 311 rough diamonds greater than 10.8 carats in size were sold. Three exceptional quality 100+ carat diamonds – of 162.02 carats, a 161.31 carats and 132.55 carats, were sold for $11.1 million, $2.4 million and $7.5 million, respectively.
Gem Diamonds’ CEO, Clifford Elphick commented: “This has been a strong half-year for Gem Diamonds with one of the best ever performances at Letšeng. This, reflects the current mine plan and the technical improvements and optimization programs which are taking place at Letšeng. Additionally, good progress has been made with the development of the Ghaghoo mine.
"The mine has been built and commissioning has begun. This new mine will unlock considerable long-term value. The company has increased its cash position to a group cash balance of $114 million which is significant given the board’s stated intention to pay a maiden dividend for the 2014 year.
"Letšeng continues to prove its world class asset status. The ongoing focus on low capex, value accretive projects is delivering value resulting in increased diamond liberation and reduced diamond damage. This, together with the current mine plan and the higher proportion of Satellite Pipe ore mined, has resulted in a 29 percent increase in carats recovered compared to the corresponding 2013 period. This has, in turn, supported strong sales meeting robust demand throughout the period.
"At Ghaghoo the first sale of diamonds is scheduled to take place before the year end. The first diamonds produced during the commissioning of the plant have, as anticipated, been of a significantly higher quality and average size than those mined during the exploration phase. A 20 carat and two 10 carat diamonds have been recovered from the first 2,400 carats recovered as at end of June 2014. This compares to the largest diamond recovered in the exploration sampling of seven carats. During the development of the production level there has been a greater quantity of water encountered than indicated by the exploration drilling. Steps have been taken to deal with this and it is not anticipated that there will be any impact on the planned production targets for 2014.
It is also very pleasing to see the greatly enhanced reserves and resources position of the company after the latest drilling and evaluation campaign. All of Letšeng’s optimal open pit now falls within the indicated resource category and thus converts to probable reserves, approximately doubling the in-situ value of the reserve to $4.6 billion and the open pit life of mine has been extended to 22 years.”