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Gem Diamonds Letšeng Sales -10% in 4Q
Mining Company Says Rough Prices to Remain Weak in 1Q 2015
Jan 27, 2015 3:16 AM
By Avi Krawitz
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RAPAPORT... Gem Diamonds sales fell 10 percent year on year to $67.7 million from its high-value Letšeng mine in Lesotho in the fourth quarter that ended on December 31. The company noted a cautious market environment at the end of 2014.
“The long-term outlook for the diamond market remains strong; however, during the fourth quarter, the diamond market saw a weakening of prices following a year of price growth,” said Clifford Elphick, the CEO of Gem Diamonds. “This trend may continue into the first quarter of 2015.”
The company explained that sentiment in the rough and polished markets was cautious in the second half of 2014 due to constrained liquidity, which exerted downward pressure on rough diamond prices. However, Letšeng’s high-value rough production remained relatively resilient during the period.
Letšeng’s sales achieved an average price of $2,140 per carat during the quarter, which was down 18 percent from the third quarter and 16 percent below the $2,533 per carat reported in the fourth quarter of 2013.
Gem Diamonds noted that it sold 13 exceptional rough diamonds for more than $1 million each, including a 112.60-carat white diamond that sold for $5.8 million and a 90.40-carat white diamond that sold for $4.2 million.
In total, the company sold 31,614 carats of diamonds during the quarter, up 6 percent from the 29,825 carats sold the previous year. Production fell 10 percent to 25,525 carats.
Gem Diamonds said it is on track to complete a new coarse recovery plant at Letšeng in the second quarter of 2015, which will improve the recovery of high-value type II diamonds.
The company is also in the commissioning phase of its Ghaghoo mine in Botswana and has a planned ramp-up of production for the beginning of 2015. Gem Diamonds has also scheduled its first sale of diamonds recovered during the commissioning phase at Ghaghoo. The sale of 10,000 carats of diamonds will be held in Gaborone and Antwerp in January and February.
For the full year of 2014, Letšeng sales rose 12 percent to $276.8 million as the average price of sales increased 24 percent to $2,540 per carat. Production grew 14 percent to 108,569 carats, while the amount of goods sold rose 12 percent to 108,963 carats. The company expects production and sales of between 100,000 carats and 105,000 carats in 2015.
Shares in Gem Diamonds fell about 5 percent to 160 pence in early Tuesday morning trade on the London Stock Exchange following the announcement.
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Tags:
Avi Krawitz, diamonds, Gem Diamonds, Ghaghoo, Lesotho, Letšeng, Rapaport
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