Large-stone demand boosts Letšeng sales

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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.

To boost its large-stone discoveries further, Gem Diamonds is considering introducing technology to prevent diamonds breaking up by identifying precious stones in the kimberlite prior to crushing. The company is working with experts from the University of Johannesburg on this project.

Meanwhile, the company has received a conditional offer for its Ghaghoo mine in Botswana, which it has been looking to sell due to a drop in prices for its more commercial-quality rough. Due diligence and discussions with the potential buyer are ongoing, Gem Diamonds said.

The miner, which stopped operations at Ghaghoo earlier this year, sold 13,021 carats of remaining rough from the asset during the third quarter for an average price of $175 per carat.

At an average elevation of 3,100 metres above sea level, Letšeng is also one of the world’s highest diamond mines. – Agencies

 

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