Gem Diamonds' H1 Letseng Output Falls 26%

Gem Diamonds Limited recovered 42,268 carats of rough diamonds from its Letšeng mine in Lesotho during the half-year period ending June 30, 2013, down 26 percent compared to both the first and second halves of 2012.

Letseng Production

The volume shortfall is attributable to a reduction of tonnes treated due to the installation of four secondary and tertiary cone crushers within the treatment plants, which are aimed at reducing diamond damage. Tonnes treated fell 4 percent from the second half of 2012 to 3.04 million tonnes. Lower grade ore from Letšeng's Main pipe and mining in an area with a high internal basalt content also contributed to the lower output levels for the six-month period.

During the first half of the year, a total of 252 rough diamonds greater than 10.8 carats in size were recovered from the mine, equating to 67 percent of Letšeng's revenue for the half-year period.

Sales: Gem Diamonds sold 47,065 carats from Letšeng for US$81.9 million, or US$1,741 per carat, during the first six months of the year, compared to 48,892 carats for US$82.6 million or US$1,690 per carat in the second half of 2012. During the first six months of the year, a 164-carat white diamond sold for US$9 million into a partnership arrangement; a 103-carat yellow diamond sold for US$810 000; and a 100-carat white diamond sold for US$6.45 million in July 2013.

An average value of US$1,741 per carat was achieved for the first five tenders of 2013, compared to US$1,690 per carat in the second half of 2012. Nine rough diamonds achieved a value in excess of US$1 million each. Additionally, 44 rough diamonds achieved prices greater than US$20,000 per carat. Subsequent to the period end, the July tender achieved an average of US$2,202 per carat.

Revised Production

The company has revised its production guidance for Letšeng for the full year, with levels of between 95,000 to 105,000 carats being produced, down from previous guidance of 115,000 to 130,000 carats produced.

Gem Diamonds Chief Executive Officer Clifford Elphick says that the company is now focused on moving mining operations to Letšeng's higher value, higher grade satellite pipe, which should "positively impact" revenues during the second half of the year. "We continue to evaluate other low cost initiatives focused on realizing additional value from our Letšeng mine," he adds.

Gem Diamonds, which has a 70 percent interest in Letšeng, is also currently developing the Ghaghoo mine in Botswana through its wholly owned subsidiary, Gem Diamonds Botswana.

https://www.diamondintelligence.com/magazine/magazine.aspx?id=12025