Gem Diamonds reported that sales of diamonds from the Letšeng mine in Lesotho fell 38 percent year on year to $58.7 million during the period January 1 through April 15, 2012 as production focused on the lower-grade main pipe.
The quantity of goods sold declined by 3 percent to 29,730 carats, while the average price from the three tenders held during the period slumped 36 percent to $1,976 per carat. First-quarter production at Letšeng, which launched a major expansion program in January, rose 6 percent to 28,114 carats.
Clifford Elphick, Gem Diamonds’ chief executive, noted however that rough diamond prices have increased by 7 percent during 2012, according to the Gem Diamonds Price Index, which measures prices from the company’s Letšeng and Ellendale mines on a like for like basis.
“The market for rough diamonds has continued to improve following the correction to prices in September 2011,” the company stated. “Gem Diamonds anticipates rough prices across the market to continue increasing into [the second quarter of 2012].”
The company added that despite the relatively thin volumes of high end polished being traded, prices in these goods both in the polished wholesale market and high end branded auctions are expected to improve further.
The average price of rough sold from the Ellendale mine more than doubled to $1,049 per carat, boosting sales by 46 percent to $24.3 million during the first four months of the year. Sales included 4,849 carats of fancy yellow diamonds supplied to Tiffany & Co with the average price on these goods up 15 percent to $4,326 per carat. Production at Ellendale increased 24 percent to 31,616 carats.
Gem Diamonds did not provide an update about its re-evaluation of its ownership of Ellendale. The company announced in November 2011 that it is considering its options regarding the mine.
Gem Diamonds also owns the Ghaghoo mine development in Botswana where construction is expected to start in June 2012. Production is expected to launch in the second half of 2012.