Gem Diamonds posted 5.9% production growth at Letšeng mine

Gem Diamonds Limited released its interim management statement for the period from 1 January to 15 April 2012, e-mailed to Rough&Polished.
The company posted 5.9% year-on-year growth of production at Letšeng, saying that a total of 28,114 carats of diamonds were recovered during Q1 2012. The recovered grade at Letšeng during Q1 2012 was up 10.6% on Q1 2011, while average value of the stones achieved $1,976 per carat for the three tenders held in the above period.
On 6 April 2012 Gem Diamonds recovered an exceptional 155 carat type IIa white diamond and also reported that 9 rough diamonds achieved an average value in excess of $1 million each during the period.
Letšeng diamond mine produced a total of 43 rough diamonds that achieved prices greater than $20,000 per carat, equivalent to 55% of Letšeng’s revenue for the period. A total of 185 rough diamonds produced at Letšeng exceeded 10.8 carats in size in the period.
At Ellendale diamond mine located in Australia, Gem Diamonds noted continued improvement in plant throughput and diamond production following the commissioning of the
primary plant feed section of the processing plant, as well as achievement of overall average price of $1,049 per carat, with its fancy yellow diamonds sold to Tiffany &Co. achieving an average of $4,326 per carat during Q1 2012.
During the period in report works at Ghaghoo project progressed well with plant construction commencing on 16 April. The advance rate of the decline has however been slower than expected with challenges encountered in advancing through an area of unconsolidated sand.
Gem Diamonds’ CEO, Clifford Elphick commented: “The Letšeng resource has exceeded expectations and it is pleasing to note that carat production and grade are both up when measured against the corresponding period last year. In addition, the Gem Diamonds Price Index (which measures prices for Letšeng and Kimberley rough diamonds on a like for like basis) is up some 7 percent for 2012, reflecting a continued strengthening of the market for higher end rough diamonds. The Letšeng expansion project Kholo has commenced and is progressing well.
Ellendale has performed well and carat production and ore mined are significantly ahead of the corresponding Period of 2011. The average price achieved for Ellendale’s sales in the Period is more than double that of Q1 2011.”
According to the company’s statement, the rough diamond market has continued to improve following the correction to prices in September 2011.
Gem Diamonds anticipates rough prices across the market to continue increasing into Q2 2012 and, despite the relatively thin volumes being traded in the polished market in high end goods, prices in these goods both in the polished wholesale market and high end branded auctions are expected to improve further.

Tatiana Alexandrova, Rough&Polished, Moscow