Gem Diamonds reports solid third quarter, but revises down full-year guidance
London-listed Gem Diamonds achieved an average price exceeding $2 000/ct for diamonds sold on tender from its Letšeng diamond mine, in Lesotho, during the third quarter, despite the current downturn in the global economy.
The company reports in a trading update for the quarter ended September 30 that it generated $56-million of revenue at an average price of $2 028/ct, compared with an average price of $1 589/ct achieved in the third quarter of last year.
Gem recovered 25 018 ct of diamonds during the quarter, amounting to 80 174 ct recovered in the year-to-date, selling at an average price of $1 838/ct in the year-to-date.
The highest price achieved in the quarter under review was $79 543/ct for a 10.07 ct pink diamond.
About $15-million of the company’s revenue was generated from four diamonds greater than 100 ct.
Gem entered the last quarter of the year with $5.4-million of net cash and undrawn and available facilities of $65-million.
After the quarter ended, however, production at the Letšeng mine was impacted on by the general election in Lesotho, on October 7, and the compulsory two-day shutdown of operations legislated by the government to allow employees to vote in their home wards, CEO Clifford Elphick says.
Additionally, Gem reports that a crusher broke down at the mine’s Plant 2, which has since been repaired and is running at normal capacity.
The impact of the loss of production in October has, however, resulted in Gem revising downward its full-year guidance for tonnes treated to about 5.4-million tonnes, after setting it originally at between 5.6-million and 5.8-million tonnes.
Carats recovered will, therefore, likely amount to 104 000 ct, instead of the previously envisaged 112 000 ct to 116 000 ct.
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