Gem Diamonds reports increase in Q3 diamond sales

JOHANNESBURG (miningweekly.com) – Sales from Aim-listed Gem Diamonds’ Letšeng mine, in Lesotho, increased by 19% year-on-year to $48.1-million in the third quarter ended September 30.

The company attributed this to improved demand for high-value rough diamonds, which benefited prices.

Production at Letšeng increased by 26% to 30 774 ct.

The recovery of high-end diamonds is also improving, with the mine having yielded six diamonds larger than 100 ct in the first nine months of the year, compared with just four throughout 2016.

“The market for Letšeng’s high-quality diamonds has remained firm over the period, with the July tender achieving nearly $2 400/ct,” CEO Clifford Elphick said in a statement on Tuesday.

The company sold a 7.87 ct pink diamond for $202 222/ct, the second-highest average price in the Lesotho mine’s history.

A 55.58 ct white diamond sold for $61 778/ct, the highest average price for a white diamond from the mine this year, the company added.

Other sales highlights in the quarter included a 126.75 ct diamond, which fetched $56 402/ct.

Meanwhile, the company has received a conditional offer for its Ghaghoo mine, in Botswana, which it has been looking to sell owing to a drop in prices for its more commercial-quality rough diamonds.

“Due diligence and discussions with the potential buyer are ongoing.”

The miner, which stopped operations at Ghaghoo earlier this year, sold 13 021 ct of remaining rough diamonds recovered at the mine at an average price of $175/ct during the third quarter.

“The group-wide efficiency and cost reduction review is progressing well and has already identified annual and one-off cost savings of $20-million, which is an increase of $5-million over the figure announced at the time of our interim results,” Elphick said.