5th Sep 2018 09:25
LONDON (Alliance News) - Gem Diamonds Ltd on Wednesday said its profit grew significantly in the first half of 2018 helped by sale of a 910 carat diamond found in Lesotho.
The miner said pretax profit multiplied to USD64.8 million in the six months to the end of June compared to USD2.3 million reported for the same period a year earlier, as revenue jumped to USD167.7 million from GBP92.9 million.
The company owns a 70% interest in the Letseng mine in Lesotho and the entire Ghaghoo mine in Botswana.
Gem Diamonds said it placed the Ghaghoo mine on care and maintenance last year and decided to proceed with its sale. The damage caused by an earthquake in April last year to the seal of the underground water fissure was repaired in July, and the company said it began a formal sale process.
Meanwhile, at Letseng, mining progressed in line with the mine plan, the company said. A new scrubber shell was successfully installed in plant 2 and feed rates returned to normal post the planned shutdown.
In the first-half, Gem Diamonds said it recovered 61,596 carats, up 22% from 50,478 carats recovered a year ago. The company said it achieved an average price of USD2,742 per carat, up 54% compared to USD1,779 per carat the year before.
Gem Diamonds highlighted that it recovered two diamonds greater than 100 carats, plus the 910 carat 'Lesotho Legend'.
Ore production totalled 3.0 million tonnes during the period, 6.7% higher year-on-year from 3.2 million tonnes.
The company said it completed four tenders during the period, with a total of 61,696 carats sold. Letseng achieved a record for its rough tender revenue of USD169.2 million, up from USD88.8 million reported in the first half of 2017. The recent figure included the sale of the Lesotho Legend.
The Lesotho Legend achieved a price of USD40.0 million or USD43,912 per carat, on tender in March.
"We are pleased to report our 2018 half yearly results," said Chief Executive Clifford Elphick. "Letseng's improved recoveries combined with the discovery and subsequent sale of the Lesotho Legend has generated a strong set of results."
Shares in Gem Diamonds were trading 1.7% higher on Wednesday morning at 118.00 pence each.
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