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Gem Diamonds Jumps Back into Black
Mar 14, 2018 10:55 AM
By Rapaport News
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RAPAPORT... Gem Diamonds returned to profit last year, after the
devaluation of an underperforming mine drove it to a loss in 2016.
The miner recorded a net profit of $17.2 million for 2017,
versus a loss of $144.1 million in 2016, it said Wednesday. The 2016 loss was mainly
the result of a $170.8 million impairment charge, after the company decided to
cease production at the Ghaghoo mine in Botswana due to weak prices. Gem
Diamonds is currently seeking a buyer for the mine, and intends to focus
primarily on its higher-value Letšeng asset in Lesotho.
Much of the miner’s financial performance depends on its
success in recovering large diamonds. In 2017, revenue rose 13% to $214.3
million as it found seven stones above 100 carats, compared with five in 2016,
while the average price jumped 14% to $1,930 per carat. Since the start of
2018, the company has already recovered seven stones over 100 carats,
including, most recently, a 169-carat, white, type IIa stone it unveiled
Wednesday.
“The second half of 2017 saw the company begin to benefit
from the operational improvements implemented during the year, with a
significant improvement in the recovery of the large diamonds from Letšeng,”
said Clifford Elphick, CEO of Gem Diamonds. “The market for the mine’s large,
high-quality white rough diamonds remained strong over the course of 2017, a
trend which has continued into early 2018.”
The miner recently sold the 910-carat Lesotho Legend — believed
to be the fifth-largest diamond in history — for $40 million at tender in
Antwerp, after extracting the rough diamond in January.
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Tags:
Botswana, Clifford Elphick, Gem Diamonds, Ghaghoo Mine, impairment, Lesotho, Lesotho Legend, Letšeng, Rapaport News
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