Gem Diamonds sees strong performance and growth potential in H1.

In the six months ending June 30, 2014, Gem Diamonds achieved 80 percent increase in the revenues from its Letšeng mine in Lesotho to US$ 147.8 million over the same period last year. Also, the number of carats recovered from the mine rose 29 percent increase to 54,678 in carats. There was a 14 percent increase in carats sold to 53,799 in the first five tenders of 2014, compared to H1 2013, while the average value per carat rose 58 percent to US$ 2 747.

Gem Diamonds’ CEO, Clifford Elphick said, “This has been a strong half-year for Gem Diamonds with one of the best ever performances at Letšeng. This, reflects the current mine plan and the technical improvements and optimisation programmes which are taking place at Letšeng.”

Around 37 rough diamonds achieved a value in excess of US$ 1.0 million each, while 77 rough diamonds achieved a value in excess of US$ 20 000 per carat and 5 rough diamonds achieved a value in excess of US$ 60 000 per carat. A total of 311 rough diamonds greater than 10.8 carats in size were sold.

Clifford Elphick further added that, “Letšeng continues to prove its world class asset status. The ongoing focus on low capex, value accretive projects is delivering value resulting in increased diamond liberation and reduced diamond damage. This, together with the current mine plan and the higher proportion of Satellite Pipe ore mined, has resulted in a 29 percent increase in carats recovered compared to the corresponding 2013 period. This has, in turn, supported strong sales meeting robust demand throughout the Period”.

Referring to the Ghaghoo mine he added, “Additionally, good progress has been made with the development of the Ghaghoo mine. The mine has been built and commissioning has begun. This new mine will unlock considerable long-term value. The Company has increased its cash position to a Group cash balance of US$ 114 million which is significant given the Board’s stated intention to pay a maiden dividend for the 2014 year.” Also, “At Ghaghoo the first sale of diamonds is scheduled to take place before the year end. The first diamonds produced during the commissioning of the plant have, as anticipated, been of a significantly higher quality and average size than those mined during the exploration phase. A 20 carat and two 10 carat diamonds have been recovered from the first 2 400 carats recovered as at end of June 2014. This compares to the largest diamond recovered in the exploration sampling of 7 carats.”