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Gem Diamonds Lowers Full-Year Outlook

Nov 6, 2019 8:25 AM   By Rapaport News
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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)
Tags: Clifford Elphick, Gem Diamonds, Letšeng mine, Rapaport News
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