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Letšeng Sales -9% Between January and May 2015

Average Price Slumps from Year Ago Amid Cautious Rough Market

May 21, 2015 6:19 AM   By Avi Krawitz
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RAPAPORT... Gem Diamonds reported that its sales of diamonds from the Letšeng mine in Lesotho garnered $77.1 million at an average price of $2,146 per carat during the first three tenders of the year that took place between January and May 20. The average price was 21 percent below those recorded one year earlier, while total sales fell 9 percent. Prices were flat compared to the preceding fourth quarter of 2014.

“It is pleasing to see that the prices achieved for the first three Letšeng tenders of 2015 are on a par with those of [the fourth quarter] of 2014, despite a noticeably weaker overall market for [the first quarter of] 2015 as reported by other diamond producers,” said Clifford Elphick, the CEO of Gem Diamonds.

The company noted continued caution among diamond traders, with increased liquidity constraints due to lower available bank credit, which is placing pressure on the rough diamond market.

Gem Diamonds stated that it achieved a value above $1 million for eight diamonds recovered during the period at Letšeng, which is known for its high-value production. A 314-carat, type IIa, white diamond was recovered and sold into a partnership arrangement for polishing in May 2015. Another three high-quality diamonds weighing more than 100 carats each were also recovered at Letšeng during the year, the company reported.

Gem Diamonds said it has revised its sales strategy to host eight tenders each year rather than 10. As a result, the lower-value smaller commercial production will be accumulated for larger volume sales that will take place once every quarter.

Production at Letšeng reached 31,369 carats during the period January to April, which was 8 percent lower than the preceding four-month period. The average grade recovered fell 3 percent between the periods to 1.58 carats per hundred tonne.

The company stated that it completed phase 1 of an upgrade to plant 2 at Letšeng, increasing the plant capacity to 250,000 tonnes per year.

Gem Diamonds is also developing the Ghaghoo mine in Botswana, where it has recovered 16,174 carats of diamonds from 67,330 tonnes of treated ore to date. The mine is on track to ramp up to full production in the second half of 2015, the company stated.

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Tags: Avi Krawitz, diamonds, Gem Diamonds, Letseng, Rapaport
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