Weak Prices, Lack of Large Stones Hit Gem Diamonds

Gem Diamonds’ revenue declined in the third quarter as a lower proportion of large stones dented the average price of its rough.

Sales from the company’s Letšeng mine in Lesotho slid 40% year on year to $25.7 million for the three months that ended September 30, it said Thursday. Sales volume fell 14% to 22,830 carats, while the average price dropped 30% to $1,124 per carat. However, revenue was up 9% from the previous quarter as a 15% rise in the average price outweighed a 5% drop in sales volume.

Gem Diamonds sold two diamonds for more than $1 million each, generating revenue of $2.3 million during the period. That compares to a year earlier, when it sold six in that range, garnering $6.1 million. The highest price achieved in the three months from July to September was for a 32.01-carat white diamond, which realized $33,785 per carat.

During the period, the miner retrieved three diamonds greater than 100 carats. Following the quarter’s end, the company found a 319-carat diamond, bringing the total so far this year to eight diamonds over 100 carats. At the same point in 2024, Gem Diamonds had accumulated 13 of that magnitude.

Production decreased 10% to 22,268 carats for the period, as the miner recovered lower-grade ore. Output also slipped 5% from the second quarter.

The company is on track to meet its guidance for the year. It has also taken measures to conserve money and anticipates monthly savings of $15 million moving forward, it added.

Image: The Letšeng mine. (Gem Diamonds)