Global diamond producer Gem Diamonds recovered 47 165 ct from the Letšeng mine, in Lesotho, during the first six months of 2009, a 
improvement of 6% on production for the corresponding period in 2008, the company said last week.

The London-listed miner had recovered 68 687 ct from its Ellendale mine in Australia, which was 63% lower than a year earlier, as the company had put its E4 pipe on care and maintenance.

While more carats were recovered, first-half sales fell by 28%. 
Gem Diamonds had sold 
56 663 ct from the Letšeng mine 
during the six-month period, gen-
erating sales of $74,1-million, which was down 18% on the $89,95-
million generated a year earlier.

The company sold 192 732 ct 
from its Ellendale E9 pipe, generating $30,8-million in the six-month period, compared with $59,55-million a year earlier.

Rough diamond prices had firmed across most categories during the second quarter of 2009, following on the unprecedented falls in the fourth quarter of 2008, and the first quarter of this year.

A total of 20 diamonds from Letšeng sold at prices greater than $20 000/ct in the first half of the year, including a 49-ct stone which sold for $37 100/ct, a 52-ct stone which sold for $36 942/ct and a 
126-ct stone which sold for 
$32 685/ct.

“The diamond market experienced further falls in prices of rough diamonds at the beginning of the first half of this year; however, in recent months, prices first stabilised and then strengthened,” said Gem Diamonds CEO Clifford Elphick.

“While I remain cautious about the strength of consumer demand in the important US market, large diamonds from our flagship mine, Letšeng, remain some of the most sought after, attracting high 
prices per carat.”


Elphick said Gem Diamonds remained focused on cash preservation and generating maximum cash flow from its higher-value 
assets, Letšeng and the Ellendale E9 operation, in Australia.

Since placing the E4 operation, in Ellendale, on care and maintenance in February 2009, significant operational progress had been made in maximising 
returns from Ellendale’s E9 pipe.

Mining unit costs at both Let-šeng and Ellendale continued to 
be negatively impacted on by the 
recent strengthening of the Lesotho loti and the Australian dollar.

Despite the continued operational improvements at the E9 pipe at Ellendale, in Australia, the strengthening of the Australian dollar meant that the E9 pipe 
remained marginal at current diamond prices.

Gem Diamonds said it would review progress at Ellendale at a board meeting next month.

Gem Diamonds would release its financial results for the interim period on August 26.

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