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Gem Diamonds 1H Letšeng Revenue +14%
Jul 29, 2014 3:52 AM
By Deena Taylor
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RAPAPORT... Gem Diamonds reported that rough diamond sales from the Letšeng mine in Lesotho rose 14 percent year on year to $53.8 million in the first half of 2014. The average price of the goods rose 58 percent mainly due to strong prices achieved from five tenders that were held for exceptional quality diamonds.
Letšeng's production grew 29 percent year on year to 54,678 carats mainly due to an increased percentage of the high-grade ore from the satellite pipe coupled with technical improvements in plant liberation and throughput. Gem Diamonds revised its full year guidance for Letšeng production to between 95,000 to 100,000 carats, compared with its previous guidance one year ago of up to 95,000 carats.
The company sold 53,799 carats for an average price of $2,747 per carat during the period, compared with 47,065 carats selling for $1,741 per carat one year earlier. During the first half, 37 diamonds sold for over $1 million each, 77 stones achieved a value in excess of $20,000 per carat, while five stones sold for over $60,000 per carat. Additionally, three diamonds larger than 100 carats achieved top prices based on their color, clarity and shape. These included a 162.02-carat diamond which sold for $11.1 million or $68,687 per carat, a 161.31-carat stone which fetched $2.4 million or $14,636 per carat, and a 132.55-carat diamond that sold for $7.5 million or $56,492 per carat.
Gem Diamonds explained that demand for rough diamonds across the spectrum remained strong during the period, in particular for large, high-value, rough diamonds. The company also noted a healthy market for diamonds from Letšeng, with strong prices maintained at the first tender of the second half held during July.
The company remains positive going into the second half as diamond consumption continues to rise and as strengthened economic activity boosts consumer confidence and spending. Sentiment and trading in the polished market also remains robust, with good prices achieved for large, high-quality diamonds sold during the period.
At the Ghagoo mine in Botswana, the company recovered 2,400 carats including a 20-carat diamond and two 10-carat diamonds. Clifford Elphick, the CEO of Gem Diamonds, noted that the first diamonds produced during the commissioning of the plant are of a significantly higher quality and average size compared to those mined during the exploration phase, in line with the company's expectations.
To date, the development of three production tunnels on the first level of the mine is underway, with build-up to planned production levels by the end of 2014 on track. Gem Diamonds expects to hold its first tender of Ghagoo production before the end of the year.
On June 30, $82 million of the total capital budget of $96 million for Ghagoo had been spent.
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Tags:
Deena Taylor, diamonds, Gem Diamonds, Ghagoo, Letšeng, Rough Diamonds
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