20th Aug 2014 07:03
LONDON (Alliance News) - Gem Diamonds Ltd reported a dazzling set of first-half results Wednesday, saying profit more than doubled and revenue rose 54%, driven by a strong performance at its Let?eng mine in Lesotho.
The diamond producer said its still on track to pay out a first dividend at the end of the 2014 financial year, supported by an increase in its cash position in the first-half, with cash on hand of just short of USD114 million.
"Strong sales and robust demand throughout the period has underpinned the positive start to the year," said Chief Executive Clifford Elphick in a statement.
The company said an "exceptional performance" at the Let?eng mine saw an increase in revenue of 54% to USD148.9 million in the six months to June 30, compared with USD96.5 million the previous year, which it said was driven by both increased volume of carat sales and higher diamond prices.
The strong revenue growth drove first-half pretax profit up to USD54.8 million from USD23.2 million in the first half of 2013.
"The ongoing focus on low capex, value accretive projects, resulting in increased diamond liberation and reduced diamond damage have been implemented at Let?eng and are bearing fruit," said Elphick.
Let?eng achieved an average price of USD2,747 per carat from the sale of 53,799 carats during the Period, compared to the average price of USD1,741 per carat from 47,065 carats achieved last year.
During the first-half, Gem Diamonds recovered 29% more carats than last year, of 54,678.
The company said its Ghaghoo mine in Botswana has made good progress, with the mine having been built on time and on budget, with commissioning already begun.
Gem Diamonds owns 70% of the Let?eng mine in Lesotho, in partnership with the government of Lesotho which owns the remaining 30%, and 100% of the Ghaghoo mine in Botswana.
"The first diamonds produced during the commissioning of the plant have, as anticipated, been of a higher quality and average size than those mined during the exploration phase," said Elphick.
Gem Diamonds said that during the development of the underground production level, a significant ingress of water was encountered, but was dealt with quickly and efficiently. It said it does not expect the problem to affect planned production targets for 2015.
Gem Diamonds shares were up 2.2% at 212.25 pence at the open Wednesday.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Gem Diamonds Di