Letšeng Rough Sales Remain Strong

Gem Diamonds Letšeng mine continued to deliver a strong operational performance, with production in line with expectations and the continued recovery of high value and exceptionally large diamonds, the company reported in a management statement. Sales from Letšeng rose 46 percent to $55.2 million in the July through November period. The company sold 22,733 carats of Letšeng rough, up 1 percent year on year while the average price of production increased 44 percent to $2,426 per carat.

The company noted that 15 rough diamonds achieved a value of over $1 million during the period, with 50 rough diamonds fetching prices greater than $20,000 per carat. Letšeng also recovered 171 diamonds greater than 10.8 carats in size.

In October, the company sold the Letšeng Star, a 550-carat white diamond valued at $16.5 million, into a profit sharing arrangement for finished goods as part of the company’s marketing strategy aimed at maximizing revenue generation from exceptional rough diamonds by seeking value-added initiatives further up the diamond value chain.

“We have enjoyed a good performance during the period, despite a softening in rough diamond prices, especially evident in lower quality diamonds, since the peaks of July 2011,” said Gem Diamonds’ chief executive Clifford Elphick. He noted that the company remains confident in the underlying fundamentals supporting the diamond market in the medium to long term.

The company’s October tender achieved an average price of $2,300 per carat where prices for exceptional diamonds remained fairly robust, the company reported. Six diamonds achieved over $40,000 per carat with a fancy pink diamond fetching $156,000 per carats.

Gem Diamonds sales from its Ellendale mine in Australia rose 68 percent year on year to $23.7 million as volume increased 9 percent to 23,393 carats. The average price achieved rose 55 percent to $1,015 per carat. This included 3,918 carats of fancy yellow diamonds sold to Tiffany & Co. for an average $5,193 per carat.

During the first nine months of the year, Gem Diamonds sales at Letšeng rose 97 percent year on year to $215.7 million while Ellendale sales rose 20 percent to $56.9 million.

On October 28, 2011 Gem Diamonds completed the sale of its 80 percent interest in its alluvial diamond mining company, PT Galuh Cempaka in Indonesia, for $5 million. The company also stated that the first stage development of the Ghaghoo diamond mine in Botswana is progressing well and remains on schedule and within budget.

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