Friday, 14th August 2020

Gem Diamonds’ underlying EBITDA (earnings before interest, taxes, depreciation, and amortization) contracted to $25.3 million in the first half of 2019 from $70.7 million, the previous year.

This, it said, resulted in an attributable profit from continuing operations of $6.2 million down from $26.8 million, a year earlier.

Pressure on pricing of smaller, commercial type rough diamonds has continued with inventories in the manufacturing and polished markets remaining high following a disappointing 2018 holiday season and weak subsequent restocking.

The price for Letšeng's large, ultra-high-quality production is, however, expected to be less vulnerable to market pressures over time.

The group's revenue was $91.3 million during the period under review compared with $167.7 million generated in the first half of 2018.

A 13.32 carat pink diamond was sold for a Letšeng record of $656 934 per carat, contributing $8.8 million to revenue.

“As Letšeng transitioned into a new cutback during the period, the planned lower contribution of the higher-value satellite pipe ore reduced both price and volume of carats sold during the period, when compared to H1 2018, which had a higher contribution from the satellite pipe ore and the recovery and sale of the 910 carat Lesotho Legend for $40 million,” it said.

Meanwhile, Gem said diamonds recovered from all sources were 56, 668 carats, representing a decrease of 8% from 61, 596 carats in the first half of 2018, notwithstanding the increase in tonnes treated, and was mainly driven by the mining mix treated during the period.

Overall grade for the first half of 2019 was 1.70 carats per hundred tonnes (cpht) mainly impacted by the higher contribution of Main pipe ore, which has a lower grade relative to Satellite pipe ore.

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