AMN - LESOTHO: Gem recovers 115 carat diamond

Gem Diamonds has recovered a 115 carat, top white colour Type IIa diamond from the Letšeng mine in Lesotho. It is the ninth diamond of over 100 carats recovered in 2018, already exceeding the total number of diamonds of over 100 carats recovered in 2017.

The company, which is a leading global diamond producer of high-value diamonds, owns 70% of the Letšeng mine and 100% of the Ghaghoo mine in Botswana, which is being sold. Letšeng is the highest dollar per carat kimberlite diamond mine in the world

Gem also recently announced that Johnny Velloza, formerly chief operating officer, has been appointed deputy chief executive officer of the company with effect from May 2, 2018.

Johnny Velloza will join the company’s Board with effect from July 1, 2018, and will continue to be responsible for the company’s operations.

During the March quarter, seven diamonds greater than 100 carats were recovered.

The Lesotho Legend, a high-quality 910 carat, D Colour Type IIa diamond, which was recovered on January 15, was sold on March 12 for US$40 million. This is the second largest gem-quality diamond recovered in the past century and the largest diamond recovered to date at the Letšeng mine.

The company sold 32,412 carats and achieved an average price of US$3276 per carat for the period, up 48% from US$2217 per carat in the previous quarter.

There were 16 diamonds sold for more than US$1 million each, generating revenue of US$70.7 million during the period.

CEO Clifford Elphick said: “We are delighted with the outcome of the sale of The Lesotho Legend, which demonstrates the exceptional quality of the diamond itself, as well as reaffirming the unique quality of Letšeng’s diamond production.

"It is encouraging to see the improvement in the frequency of large diamond recoveries during the period with seven diamonds greater than 100 carats being recovered, supported by strong production results driving an 8% increase in carats recovered.

"The market for Letšeng’s high-quality diamonds has remained robust over the period, achieving an average price of US$3276 per carat, up 48% from the previous quarter."

Gem has started a formal sale process to sell the Ghaghoo mine with Nedbank Capital appointed as corporate advisor on this transaction.

The company's targeted US$100 million of cumulative cash cost savings and productivity improvements over the next four years is on track, with initiatives which will contribute about US$27 million of this target implemented to date.

www.gemdiamonds.com