30th Jul 2015 10:23
LONDON (Alliance News) - Gem Diamonds Ltd Thursday said production and sales fell in the first half of 2015 and said the development of the Ghaghoo mine in Botswana is progressing slower than planned.
The diamond miner said it recovered 22,472 carats of diamonds in the first quarter, rising to 27,574 carats in the second to bring the total figure to 50,019 carats for the first half, which was down 7% from 53,890 carats a year earlier. That was due to grades in the first half falling to 1.61 carats per tonne from 1.69 carats.
Sales also fell 15% in the first half to 46,981 carats to generate USD106.3 million in sales compared to selling 55,164 carats a year earlier to generate USD129.0 million. The fall in sales was exacerbated by lower prices, averaging USD2,264 per carats in the first half compared to USD2,338.
At the company's main Letseng mine in South Africa, Gem Diamonds said it recovered 13 rough diamonds worth over USD1.0 million each, which are in addition to the 314 carat white diamond that has already been reported. That white diamond will be sold in the third quarter.
"The recovery of large high quality diamonds continues to define the Let?eng mine, and it is pleasing to see that prices for these goods have remained firm despite the current difficult diamond market conditions," said Chief Executive Clifford Elphick.
A second parcel of 29,891 carats from the commissioning phase at the Ghaghoo mine was also sold in the second quarter for USD4.9 million at USD165 per carat "in a difficult market," it said.
"The development of the Ghaghoo mine is progressing slower than planned due to difficult ground conditions which have hampered slot development in the first five production tunnels and constrained production ramp-up," said Elphick.
At the end of June, Gem Diamonds had a cash balance of USD83.8 million and a net cash position of USD49.6 million.
Gem Diamond shares were down 2.6% to 130.00 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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