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Gem Diamonds Sees Rising Prices at Letseng Tenders

May 12, 2014 3:49 AM   By Ronen Shnidman
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RAPAPORT... Gem Diamonds Limited reported that revenue from the Letšeng mine in Lesotho rose 75 percent year on year to $81.9 million from the first three diamond tenders of the year. Sales by volume rose 4 percent to 30,060 carats, while the average price jumped 70 percent to $2,723 per carat.

Altogether, 81 percent of the mine’s revenue during the quarter was generated from the sale of 171 rough diamond greater than 10.8 carats in size. Some 44 rough diamonds sold during the period achieved a per carat price that exceeded $20,000. In particular, two exceptional large diamonds, 162.02-carat and a 161.31-carat, sold in the first two months of the year for $11.1 million and $2.4 million, respectively.

The company’s management said that rough diamond prices were relatively strong during the beginning of the year despite liquidity concerns among dealers and manufacturers and tightened lending criteria by banks in Belgium.

“Strong diamond prices continue to be seen at the Letšeng tenders and coupled with the continuing contribution of ore sourced from the Satellite pipe at Letšeng has resulted in an increase in carats sold and improvement in the average price per carat achieved,” said Clifford Elphick, Gem Diamonds’ CEO.

Production at Letšeng rose 39 percent to 26,055 carats during the first quarter boosted by a 30 percent increase in ore grade to 1.65 carats per 100 tonnes. The improved ore grade was due to the 35 percent of processed ore sourced from the higher grade Satellite pipe, which was not mined during the same period last year. Overall, the amount of ore treated rose 7 percent to 1,580,379 tonnes during the quarter.

Gem Diamonds owns 70 percent of Letšeng, while the government's share is 30 percent. The company’s fully-owned Ghaghoo development in Botswana is on schedule to launch production in the second of half of 2014. 
Tags: Botswana, Elphick, Gem Diamonds, Ghaghoo, Lesotho, Letseng, Ronen Shnidman, white diamonds
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