Gem Diamonds' revenues in H1 slip 15%

Gem Diamonds announced its production and financial performance for the first half of 2017. During these six months, the Group revenue stood at US$92.9 million, or 15 percent lower than that achieved in H1 2016. Revenue during the six months was primarily derived from its mining operations in Lesotho (Letšeng) and to a lesser extent through additional margin generated from its rough diamond manufacturing operation in Belgium. Four tenders were completed during H1 2017, with a total of 49 930 carats sold in Antwerp through Gem Diamonds Marketing Services, a wholly owned Gem Diamonds subsidiary. Rough tender revenue of US$88.8 million* with an average price of US$1 779* per carat was achieved, bringing the 12-month rolling US$ per carat average to US$1 625* per carat.

The Group continues with its objective of maximising the value achieved on rough and polished diamond sales. The market for both rough and polished diamonds remained cautious for the first six months of the year. Letšeng’s large high-quality white rough diamonds however continued to be in strong demand and the improvement in the frequency of the recovery of these types of diamonds saw four diamonds greater than 100 carats being recovered during the Period, compared to a total of five for the full 2016 year.

There were no sales of Ghaghoo production in the Period. In February 2017, the Board made a decision to place the Ghaghoo mine on care and maintenance to preserve the value of the asset and to reduce cash consumed.

Letšeng sold 49 930 carats at an average of US$1 779* per carat (US$1 899* per carat in H1 2016) or 20 percent higher than that achieved for the immediately preceding six-month period, H2 2016, of US$1 480. During the period, two of the greater than 100 carat diamonds which were recovered, were sold, with the remaining two recovered late in Q2 2017 sold after Period end. In addition to the two greater than 100 carat diamonds sold, exceptional high-value diamonds which contributed to the increased average price achieved (compared to H2 2016), included an 8.65 carat pink diamond which was sold for US$164 855 per carat and two exceptional D-colour Type IIa diamonds of 98.42 and 80.58 carats.