|
|
Gem Diamonds' 1H Revenue Falls 28%
Jul 30, 2015 8:19 AM
By Ronen Shnidman
|
|
|
RAPAPORT... Gem Diamonds’ revenue declined 28 percent year on year to $106.3 million in the first half that ended on June 30 2015, hurt by reduced production and lower prices received for commercial-quality rough diamonds. The average price received for diamonds sold declined 18 percent year on year to $2,264 per carat.
The amount of rough diamonds sold from Letšeng declined 13 percent to 46,961 carats during the period. Similarly, production at Letšeng declined 9 percent to 50,019 carats, which the company attributed to processing less ore from the mine’s higher-grade satellite pipe and a 19-day shutdown to complete a plant upgrade. The company noted that construction of a coarse recovery plant at the mine was completed on schedule and within a budget of $11.7 million by the end of the second quarter.
The rough diamond market in the first half remained resilient for the high-value, large diamonds yielded by the Letšeng mine in Lesotho, Gem Diamonds noted in a trading update to the London Stock Exchange. However, prices declined during the period for the commercial quality diamond recovered at Letšeng and the Ghaghoo mine in Botswana that Gem Diamonds is currently bringing to commercial stage production.
“The recovery of large, high-quality diamonds continues to define the Letšeng mine and it is pleasing to see that prices for these goods have remained firm despite the current difficult diamond market conditions,” said Clifford Elphick, Gem Diamonds’ CEO.
However, Elphick noted that the development of the Ghaghoo mine was progressing slower than originally planned due to difficult ground conditions.
Still, Gem Diamonds confirmed the presence of fancy color diamonds at Ghaghoo with the recovery of small blue, pink, orange, lilac and yellow diamonds. This follows the recovery of a fancy orange diamond at the site in fourth quarter of 2014. The company also noted the recovery of eight diamond larger than 10.8 carats in size, although this is still below the anticipated frequency of large stones recoveries the company’s expects from the mine.
Gem Diamonds recovered a 48-carat diamond from Ghaghoo, the largest diamond found at the mine to date, in July following the end of the reporting period.
The company also held its second sale of commissioning production from Ghaghoo in July, after the end of the reporting period. The company said it received $4.9 million for 29,891 carats sold, or an average price of $165 per carat. Income from the first tender diamonds mined at Ghaghoo, which was held in February 2015, were not recognized as revenue in the period since full commercial production has not yet been achieved at the mine.
|
|
|
|
|
|
|
|
|
|
Tags:
Elphick, fancy color, Gem Diamonds, Ghaghoo, Letseng, Ronen Shnidman, tender
|
|
|
|
|
|
|
|
|
|
|
|
|