17th Mar 2015 10:41
LONDON (Alliance News) - Gem Diamonds Ltd Tuesday said it would pay its maiden dividend as it reported a rise in pretax profit after revenue increased on higher sales and higher carat prices, and is expecting production to further increase in 2015 as the Ghaghoo mine ramps up.
The British based diamond miner reported a rise in pretax profit to USD92.9 million for the year ended December 31, from USD59.0 million at the end of 2013 after revenue increased to USD270.9 million from USD212.8 million and it booked a USD5.2 million foreign exchange gain, up from USD600,000.
Revenue rose on the back of carat sales increasing to 108,963 carats in the period from 97,294 carats, for a higher price of USD2,540 per carat compared to USD2,043 a year earlier.
Earnings before interest, tax, depreciation and amortisation rose to USD104.2 million from USD77.4 million.
As a result, the company said it would pay its maiden dividend of 5.0 cents per share.
"2014 was a solid year both financially and operationally for Gem Diamonds. We successfully delivered on a number of key growth objectives including bringing Ghaghoo into production, significantly enhancing operational efficiencies at Let?eng and delivering a maiden dividend," said Chief Executive Clifford Elphick.
The Ghaghoo mine in Botswana is producing better quality and larger stones compared to those recovered in the exploration phase of the project, whilst also suggesting the presence of "rare coloured diamonds," it said.
As part of the Ghaghoo mine's phase one plan, a production rate of approximately 60,000 tonnes per month is expected to be achieved by mid-2015, said Gem Diamonds.
At the Let?eng mine in Lesotho, which is currently the company's sole producing asset, the company said it plans to continually invest in the project as it is "synonymous with exceptional diamonds".
"As we expand from a single producing mine to two producing mines, with the ramp up of production at Ghaghoo, we will start to see a significant shift in production figures," said Elphick.
At the end of the year, Gem Diamonds had a cash balance of USD111 million.
Still, the diamond miner shares were down 5.3% to 140.16 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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