Gem encouraged by recovery of more 100 ct-plus diamonds at Letšeng

JOHANNESBURG (miningweekly.com) – London-listed Gem Diamonds is encouraged by the improvement in the recovery of diamonds larger than 100 ct at its Letšeng mine, in Lesotho, during the first half of this year.

It recovered four diamonds larger than 100 ct in the six months to June 30, and another in July.

Overall, the mine produced 50 748 ct at a grade of 1.59 carats per hundred tonnes (cpht) during the six months, against an expected reserve grade of 1.63 cpht, mainly owing to the underperformance of the main pipe contract material and internal changes in the geology of this pipe.

A core drilling programme will be implemented during the second half of the year to improve confidence in the geology at depth, including volume, grade and revenue inputs of the resource.

During the six months, Gem sold 49 930 ct for total revenue of $88.8-million, or an average of $1 779/ct.

“The market for Letšeng's high-quality diamonds has remained firm over the period, with the last tender of the period achieving over $2 200/ct. This positive trend has continued with the most recent July tender achieving an average price of $ 2 385/ct,” commented Gem CEO Clifford Elphick.

He added that a group-wide, externally supported cost efficiency and benchmarking review has started and has already identified opportunities that are being actively pursued. Further progress on this review will be reported on during the fourth quarter of this year.

Meanwhile, the company’s Ghaghoo mine, in Botswana, was successfully placed on care and maintenance ahead of plan on March 31; however, an earthquake had damaged the seal of an underground water fissure, leading to an influx of water.

This resulted in a $600 000 increase in water pumping costs.

The fissure will be resealed during the third quarter of this year.

Gem will publish its interim financial results on August 17.