RAPAPORT... Sales from the Letšeng mine in Lesotho fell 41 percent year on year to $48.2 million as rough prices slumped during the period.
Gem Diamonds, which owns 70 percent Letšeng, estimated that rough diamond prices dropped about 12 percent in 2012, with the weakest period hitting in the third quarter.
“The Eurozone crisis, reduced liquidity from the lending banks, high stock levels in the manufacturing sector and low demand from the emerging markets in the East resulted in diamond prices in the third quarter of 2012 weakening to well below those seen at the start of the year,” said Gem Diamonds' CEO, Clifford Elphick.
He added, however, that prices steadied in the fourth quarter as market conditions improved. Gem Diamonds sold 28,324 carats of Letšeng goods for an average price of $1,703 per carat during the quarter, representing a decline in average prices of 33 percent compared with the same period a year earlier, but an increase of 2 percent from the preceding third quarter.
The company noted that prices continued to improve at its January tender as the market has stabilized ahead of the Chinese New Year.
Production at Letšeng rose 1 percent year on year to 30,181 carats during the fourth quarter. Full year production increased 2 percent to 112,367 carats and Gem Diamonds expects production to increase to between 115,000 carats and 130,000 carats in 2013. Sales in 2012 dropped 30 percent to $207.9 million with the average price for the year declining by 30 percent to $1,932 per carat.
Gem Diamonds reported that fourth quarter sales at the Ellendale mine in Australia fell 4 percent to $30.5 million with the average price of its commercial goods up 2 percent to $184 per carat. Gem Diamonds sold 4,644 carats of fancy yellow stones from Ellendale to Tiffany & Co., as part of their off-take agreement, with average prices of these goods increasing 19 percent to $50 to $91 per carat. Full year Ellendale sales rose 28 percent to $113.6 million with production up 30 percent to 155,996 carats.
Gem Diamonds on Thursday completed the sale of Ellendale to Goodrich Resources Limited for $15 million (AUD 14.4 million).
Gem Diamonds is in the process of developing the Ghaghoo mine in Botswana and expanding its operations at Letšeng.
|
|
|
|
|