Gem Diamonds Sales Rise in Solid Market for Large Stones

Gem Diamonds’ revenue increased 33% year on year to $59.5 million in the first half as resilience in the large-stone market boosted prices.

The miner’s average selling price from its Letšeng deposit jumped 38% to $1,395 per carat for the period, it reported Tuesday. Sales volume slipped 4% to 42,624 carats.

The mine in Lesotho, of which Gem Diamonds owns 70%, is famous for its large, high-value diamonds. During the six months, the miner sold eight diamonds for more than $1 million each, generating $16.1 million. This included a 52.24-carat, white diamond that fetched $32,908 per carat – the company’s highest price during the period.

Prices of small, lower-quality rough have suffered because of competition from synthetics, leading to a number of mine suspensions, Gem Diamonds CEO Clifford Elphick said. “Letšeng, with its exceptional-quality and large-diamond recoveries, however, has been less impacted, with encouragingly strong demand leading to an improvement in prices during [the first half],” he added.

Production fell 12% to 41,695 carats, reflecting a greater contribution from the lower-grade main pipe and a smaller portion coming from the higher-grade satellite pipe. Gem Diamonds will source production for the rest of the year only from the main pipe as it prepares for an additional “cutback” – an expansion of the pit wall – at the satellite pipe.

The company recovered three diamonds of 100 carats or more in the period, and sold two of them. It extracted a 346.99-carat diamond in June – which it has not sold yet – and named it the Lesotho Jubilee to commemorate the African nation’s 60th anniversary of independence on October 4.

Image: The 346.99-carat Lesotho Jubilee. (Gem Diamonds)