Gem Diamonds Limited in its trading update detailed the Group’s operational and sales performance for the period from July 1, 2018 to September 30, 2018 (Q3 2018) for its two projects: Letšeng mine (70% owner) in Lesotho and the Ghaghoo mine (100% owner) in Botswana.

At the Letšeng mine, the Company recovered two diamonds which are greater than 100 carats during the period.

On October 15, 2018, after period end, a 357-carat diamond was recovered, bringing the number of diamonds greater than 100 carats recovered during 2018 to thirteen.

In Q3 2018, the Company recovered a total of 35,755 carats at Letšeng, which marks a rise of 27% over the previous quarter.

In the period, the Company sold 30,275 carats of rough diamonds for a total of US$ 55.7 million. Gem Diamonds sold eight diamonds for more than US$ 1.0 million each, generating revenues of US$ 21.0 million during the period.

“During the Period, the highest diamond price achieved was US$ 60,428 per carat for a 138.20 carat, Type IIa, white diamond,” Gem Diamonds elaborated. “The reduction in average US$ per carat compared to Q2 2018 is a result of lower quality recoveries during the Period.”

The Company has approved a US$ 3 million pilot plant to be constructed at Letšeng with the aim of early detection of large diamonds and diamond damage reduction. “This project employs innovative technology to identify diamonds within kimberlite ore and uses non-mechanical means of liberating the encapsulated diamonds,” the Company said. “The plant will be commissioned during Q2 2019.”

Gem Diamonds reiterated that it remains on track to achieve its cumulative target of US$ 100 million in incremental revenue, productivity improvements and cost savings for the 4-year period to end 2021.

With regards to Ghagoo, the Company said that “the formal sale process for the Ghaghoo mine continues”. Gem Diamonds will provide further updates on this issue in due course.

Providing details of its financials, Gem Diamonds reported that at the end of Q3 2018, the Group had US$ 73.0 million of cash on hand, of which US$ 57.9 million is attributable to Gem Diamonds. “The Group’s net cash position was US$ 36.2 million (of which US$ 25.3 million was attributable to Gem Diamonds). US$ 36.8 million of available facilities had been drawn down, resulting in undrawn and available facilities of US$ 56.8 million,” the Company stated.

Gem Diamonds’ CEO, Clifford Elphick, commented: “Letšeng delivered solid production figures for the Period with an increase in tonnes treated and carats recovered of 26% and 27% respectively compared to the previous Period.”  

Based on “improved mining efficiencies, strong production during the Period and consistent grade recoveries”, the Company has revised upwards its production guidance for waste tonnes mined, satellite pipe contribution and carats produced and sold, from that previously reported in March 2018. Gem Diamonds now reckons that it will produce between 120,000 to 124,000 carats in the year – up from its earlier guidance of 114,000-115,000 carats. The Company expects to sell 118,000-122,000 carats as against its prior estimation of 112,000-116,000 carats.