News

Feb 14, 2020

Gem Diamonds: Q4 2019 Revenue up 41% Over Previous Quarter on Stronger Demand for Large, High Quality Rough

Gem Diamonds Limited, releasing its operational and sales performance for the three-month period ended December 31, 2019, said that there were signs of improvement in prices for the larger high-quality diamonds towards the end of last year, leading to stronger sales, an increase in average prices and a 41% rise in revenue compared to the previous quarter.

Giving details, the company said that revenue for the period improved by 41% to US$ 51.3 million (Q3 2019: US$ 36.3 million), with average price achieved increasing by 21% to US$ 1,713 per carat (Q3 2019: US$ 1,417 per carat).

Total sales were also up with the number of carats sold increasing by 17% to 29,945 (Q3 2019: 25,631).

The Company said that the trend continued in 2020 with average price achieved further improving to US$ 1,753 per carat for the first tender of 2020. It added that prices for the smaller commercial type goods rose with improvements in demand during December 2019 as the midstream started to restock, and further improvement were also noted during January and February 2020.

Gem Diamonds said it recently recovered three exceptional 183, 89 and 70 carat diamonds which will be sold in March 2020.

During Q4 2019, the Company recovered four diamonds greater than 100 carats, bringing the total to eleven diamonds greater than 100 carats for 2019. There have now been 100 diamonds of greater than 100 carats each recovered at the Letšeng mine since Gem Diamonds began operating the mine in 2006.

The quarter also saw the sale of seven diamonds for more than US$ 1.0 million each, generating revenue of US$ 15.6 million. In total, 27 diamonds were sold for more than US$ 1.0 million each during 2019, generating revenue of US$ 68.2 million.

Gem Diamonds’ CEO, Clifford Elphick, commented: “Letšeng delivered solid operational results. Carats sold are up 17% on the prior quarter. There was an increase in volumes treated for the year and a significant reduction in the waste profile. This, together with the Business Transformation programme delivering its targeted gains and continued emphasis on cost controls, positions the Company well for the anticipated upturn in the market which appears to have begun.”