LSE-listed diamond miner Gem Diamonds has sold 70 559 ct worth of diamonds for the year to date, achieving an average price of $1 908/ct.
During the third quarter, the group also unearthed five diamonds greater than 100 ct, bringing the total for the year to date to 13.
In addition, the third quarter also saw Gem selling seven diamonds for more than $1-million each, generating revenue of $25.6-million during the period.
This brought the total number of diamonds sold for greater than $1-million to 24 for the year to date.
The average diamond price achieved for the third quarter was $2 215/ct, compared with the average price of $1 714/ct in the first half of the year.
Gem CEO Clifford Elphick says the average price of $2 215/ct for the period demonstrates the improved demand for Letšeng’s high-quality large-diamond production. “These prices achieved, on a like-for-like basis, are higher than those realised in the pre-Covid-19 market conditions of the second half of 2019.”
He adds that this, together with the continued proactive cost control and cash preservation measures implemented across the group, has resulted in continued positive cash flow for the group.
In terms of net debt, the group further reduced its position by $6.6-million, ending the period in a net cash position of $1.1-million. The group ended the period with $24.5-million cash on hand (excluding $29.8-million of the September tender proceeds received after the period end).
At period end, $75-million of the targeted $100-million in incremental revenue, productivity improvements and cost savings over the four-year period to end 2021 had been delivered.
Following the commencement of ore mining and the ramp-up to planned treatment capacity during the second quarter, Letšeng successfully returned to planned waste mining activities in July. This was after the temporary suspension of operations for 30 days in line with the Lesotho government’s lockdown regulations to curb the spread of the Covid-19 virus.
“We are pleased that Letšeng has returned to normal operating activities post the lockdown period, with waste mining activities ramping up from July,” says Elphick.
Letšeng returned to full ore mining and treatment capacity in a phased manner during the second quarter and, largely in-line with planned volumes, treated 1.5-million tonnes during the third quarter. The miner reports that enhanced focus on stability and overall uptime of the Letšeng plants resulted in a conscious decision to reduce the instantaneous feed rate to each plant to reduce feed variability and enhance recovery.
Further, Gem notes that waste stripping at Letšeng resumed in July and that the planned reduced overall waste mining for the year will not have a significant impact on the future availability of ore as this was partially offset by lower volumes of ore mined and treated during the second quarter. It was also partially offset by the availability of additional exposed ore in the main pipe as a result of the redesign of a cutback.