Gem Diamonds Ltd announced yesterday that its revenue rose sharply by almost 25% to US$ 267.3 million in 2018 (2017: US$ 214.3 mn) boosted by recovery of a record 15 diamonds larger than 100 carats each (seven in 2017).

The company said its EBITDA shot up to US$ 82.3 million (US$ 48.6 million before exceptional items in 2017) and profits rose to US$ 46.6 million (US$ 20.8 million before exceptional items in 2017).

During the year, 126,875 carats were recovered at its Letšeng mine in Lesotho (111,811 in 2017) and an average value of US$ 2,131 per carat was achieved (US$ 1,930 in 2017).

Among the very large diamonds recovered, a 138.28 carat white diamond achieved US$ 60,428 per carat, the highest dollar per carat achieved for a white rough diamond during the year.

On the production front a non-mechanical liberation unit was installed at the site and the US$ 3 mn pilot plant to detect diamonds within kimberlite at Letšeng is on track to be commissioned during Q2 2019, Gem Diamonds said.

Clifford Elphick, Chief Executive of Gem Diamonds, said: “Gem Diamonds achieved a good set of results, characterised by the recovery of 15 diamonds greater than 100 carats, a record for a single calendar year. Production in 2018 also included the highest recovery of diamonds greater than 20 carats, with 80% of revenue primarily generated by diamonds greater than 10 carats.”

He also said that the mine plan for Letšeng was revised during 2018, with the aim of further reducing the waste stripping through the steepening of inter-ramp slope angles and that mining in accordance with this plan had commenced. “This is expected to significantly increase the net present value of the mine.”

Gem Diamonds also said that the Business Transformation process has progressed well and remains on-track to achieve the target of US$ 100 million in cost savings and efficiencies by 2021. “By December 2019, the initiatives already implemented are expected to deliver US$ 64 million to the end of 2021,” Elphick added.

The Company reported that cash on hand stood at US$ 50.8 million as at 31 December 2018 (US$ 43.3 million attributable to Gem Diamonds) but said that the Board had resolved not to propose the payment of a dividend in respect of the 2018 financial year and ongoing focus on the Business Transformation, in order to strengthen the balance sheet.