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SourcingMar 16, 2020
Gem Diamonds Uncovers Six Notable Stones
The miner also reported a dip in revenue and the number of carats recovered in 2019, which it attributed to an overall weakness in the market.
The miner recovered five white diamonds ranging from 33 to 114 carats and a 13-carat pink diamond. (Image courtesy of GemFind)
London—Gem Diamonds recently recovered six top-quality white and pink diamonds from its Letšeng mine in Lesotho.
Between Feb. 28 and March 3, the miner recovered five white diamonds ranging from 33 to 114 carats and a 13-carat pink diamond.
Between Feb. 28 and March 3, the miner recovered five white diamonds ranging from 33 to 114 carats and a 13-carat pink diamond.
The company recovered a 13.33-carat Type I pink diamond last February, which sold at a tender in Antwerp for $8.8 million, or roughly $656,441 per carat, to an undisclosed party.
The London-headquartered company recovered 11 diamonds larger than 100 carats in 2019 compared with 15 in 2018.
The recoveries in 2019 brought the total number of diamonds recovered at the Letšeng mine greater than 100 carats to 100.
Gem Diamonds released its full-year results Thursday, posting a drop in revenue and the number of carats recovered in 2019, which the company attributed to an overall weakness in the market.
Full-year revenue totaled $182 million, down 34 percent compared with $267.3 million in 2018.
Its profit from continuing operations dipped 70 percent to $15 million compared with $52.4 million the previous year.
In a statement from Chairman Harry Kenyon-Slaney , the company pointed to “prolonged weakness” in the rough diamond market and an oversupply of rough diamonds as underlying factors in the decline.
In a video interview, Elphick forecast better days ahead for the market, and said, “We’ve already seen prices start picking up and I think that momentum will increase as people get more confidence back into the system.”
The miner recovered 113,974 carats in 2019, down 10 percent compared with 126,875 carats the previous year.
The average value per carat was $1,637, a 23 percent drop compared with $2,131 per carat in 2018. The highest dollar per carat in 2019 for a white rough diamond was $48,255 per carat.
Letšeng is known for producing large, high-quality diamonds, and Gem Diamonds has called it the highest dollar per carat kimberlite diamond mine in the world.
The company signed a new mining lease in Oct. 2019, securing its mining rights at Letšeng until 2039. The agreement includes a 10-year exclusive renewal option from 2029.
“[The lease renewal], together with the continued emphasis on cost controls, positions the company well for an upturn in the market for Letšeng’s quality production which appears to have begun," said CEO Clifford Elphick in a press release announcing the annual results.
Per the terms of the new lease, the royalty rate on diamond sales increased to 10 percent from 8 percent. There will also be an increase in the number of work permits granted.
Shareholding in the mine remains the same with Gem Diamonds owning 70 percent and the Government of the Kingdom of Lesotho owning the remaining 30 percent.
Last year, the miner announced the sale of its Ghaghoo mine in Botswana, which was part of the sale of its entire Botswana operation.
The chairman’s letter also expressed the company’s condolences following the death of Abele Mtambo, a colleague from a sub-contracting company working at the Letšeng mine, who died in a vehicle accident earlier this year.
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