RAPAPORT... Gem Diamonds has reduced its sales guidance for the year, as
a problem with its high-value satellite pipe has forced it to mine from the
lower-value portion of its Letšeng mine in Lesotho.
The miner now expects to sell between 111,000 and 113,000
carats compared to the 115,000 to 119,000 it had previously stated in March.
Although it will increase the amount of ore treated, and has not changed its
expected output, the rough will contain a larger proportion of smaller,
lower-quality stones from Letšeng’s main pipe.
Sales of rough diamonds fell 35% year on year in the third quarter to $36.3 million
by value, and dropped 15% to 25,631 carats by volume, in the third quarter, the
miner said Tuesday. The average price declined 23% to $1,417 per carat,
compared with $1,841 per carat in the same period a year ago. Production at Letšeng
fell 23% to 27,539 carats.
“Letšeng’s high-value large-diamond production has
experienced price pressure during the period,” said Gem Diamonds CEO Clifford
Elphick. “This, together with diamonds sold from the lower-value ore mined in
the previous quarter, resulted in an average price achieved of 6% lower than
the previous quarter.”
The company found four diamonds larger than 100 carats in
the three months ending September 30, compared with two during
the same period a year ago. The highest per-carat price the company achieved during
the period was $37,408 for a D-color white diamond, it noted. Some five
diamonds fetched more than $1 million each, generating revenue of $11 million
during the quarter.
Image: The Letšeng mine. (Gem Diamonds)
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