Gem Diamonds 4Q revenue shots up by 41%
Gem provides the following Trading Update detailing the Group's operational and sales performance from 1 October 2019 to 31 December 2019 (Q4 2019). Highlights are, 1: Revenue for the period was improved by 41% to US$51.3 million in 4Q over the Q3 2019 of US$36.3 million at Gem Diamonds. 2: Average price achieved for the Period increased by 21% to US$1 713 per carat (Q3 2019: US$1 417 per carat).
3: Carats sold during the Period increased by 17% to 29 945 (Q3 2019: 25 631), 4: Average price achieved further improved to US$1 753 per carat for the first tender of 2020. 5: On 3 February 2020, recoveries of three exceptional 183, 89 and 70 carat diamonds were made and will be sold in March 2020.
6: Recovered four diamonds greater than 100 carats during the Period, bringing the total to eleven diamonds greater than 100 carats for 2019. There have now been 100 diamonds of greater than 100 carats each recovered at the Letšeng mine since Gem Diamonds began operating the mine in 2006.
7: Sold 7 diamonds for more than US$1.0 million each, generating revenue of US$15.6 million during the Period. In total, 27 diamonds were sold for more than US$1.0 million each during 2019, generating revenue of US$68.2 million. 8: The mining lease was renewed for a further 10 years, effective from 3 October 2019, with an exclusive right granted to Letšeng to renew for a further period of 10 years thereafter.
Gem Diamonds' CEO, Clifford Elphick, commented: “Letšeng delivered solid operational results. Carats sold are up 17% on the prior quarter. There was an increase in volumes treated for the year and a significant reduction in the waste profile. This, together with the Business Transformation programme delivering its targeted gains and continued emphasis on cost controls, positions the Company well for the anticipated upturn in the market which appears to have begun.
The swing to a stronger market for Letšeng's diamonds was confirmed by the 21% increase in the average price achieved during the Period of US$1 713 per carat. This improvement continued into 2020 with the first tender achieving US$1 753 per carat. The first tender of 2020 did not include the remarkable recoveries of the 183, 89 and 70 carat diamonds on 3 February.”
Diamond Market: Following pressure on the prices for the larger high-quality diamonds seen during 2019, signs of improvement were noted in December 2019 and this has continued into 2020.
Diamond prices for the smaller commercial type goods remained under pressure during 2019 with polished inventory levels remaining high. However, improvements in demand were noted in December 2019 as the midstream started to restock. Further improvement in the prices of these goods has been confirmed during January and February 2020.
