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Kimberley Diamonds Reports Production, Pays Off Ellendale Early

Jul 19, 2013 11:51 AM   By Jeff Miller
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RAPAPORT... Kimberley Diamonds Ltd., which operates the Ellendale mine, reported that revenue from the sale of rough diamonds reached $24 million (AUD 25.5 million) in the second quarter that ended on June 30. Operating expenses totaled $18 million (AUD 19.4 million), leaving profit of $5 million (AUD 5.4 million). The company had projected profit of $4 million (AUD 4.5 million) in April.  Goodrich Resources purchased Ellendale from Gem Diamonds in January, including the off-take agreement with Tiffany & Co. for the mine's fancy yellow diamonds, and it then changed its name to Kimberley Diamonds in May.

The company held its very first tender in March, at which time it sold  13,234.88 carats of rough diamonds for $12.7 million.

One year ago, Gem Diamonds reported that production at Ellendale had risen 42 percent year on year to 120,561 carats during the first nine months of 2012, while ‎sales had increased 46 percent to $83 million.  At the time, Gem Diamonds stated that 80 percent of Ellendale's revenue came from the sales agreement through Tiffany & Co.

Also this week, Kimberley Diamonds concluded its purchase agreement with Gem Diamonds through an early debt repayment of a $10 million (AUD 10.5 million). The company's acceptance into the Western Australian Department of Mines and Petroleum’s (DMP) Mining Rehabilitations Fund (MRF), allowed  it to immediately retire an $11 million (AUD 12.2 million) environmental bond, of which it in turn funded the payoff note to Gem Diamonds. Kimberley Diamonds stated that it has $8.5 million (AUD 9.3 million) cash on hand and no debt.

Alex Alexander, the executive chairman of Kimberley Diamonds, said that its  acceptance into  the MRF was a testament to the company's ongoing focus to extend the life of the Ellendale mine, while actively managing the environmental impact of its operation.

Tags: Ellendale, Gem Diamonds, Jeff Miller, Kimberley Diamonds, Production, Tiffany
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