Interim Management StatementBack
06 Nov 2014
Continued strong operational performance in Q3 2014 at LetĹˇeng. Ghaghoo ramp-up progressing.
Gem Diamonds Limited (LSE: GEMD) reports an interim management statement detailing the Companyâ€™s operational and sales performance for the Period 1 July 2014 to 30 September 2014 (Q3 2014).
Continued strong performance at LetĹˇeng
- 28 365 carats were recovered in Q3 2014 (28 623 carats in Q2 2014).
- An average value of US$2 603* per carat was achieved in Q3 2014 (US$ 2 582* per carat in Q2 2014).
- An exceptional 197.6 carat diamond recovered in July 2014 was sold during the Period for US$ 10.6 million
*Includes carats extracted at rough valuation for polishing.
Ghaghoo mine officially opened by President Seretse Khama Ian Khama on 5 September 2014
- The major ingress of water has been managed effectively. Final sealing operations are underway.
- Development is progressing in the first four production tunnels on Level 1.
- Trial stope on Level 0 prepared for training purposes.
- Work continues with minor refinements to the treatment plant in readiness for full production.
- 4 028 carats recovered as at the end of the Period, with the first sale now planned for early 2015.
Robust financial position and cashflows providing financial flexibility to meet medium to long-term objectives
- The Group increased its strong cash position to US$ 128 million cash as at 30 September 2014, of which US$ 106 million is attributable to Gem Diamonds.
- The US$ 25 million facility for Ghaghoo Phase 1 has been fully drawn down.
- The LetĹˇeng Maloti 140 million (US$ 12.5 million) debt facility for the full cost of the new Coarse Recovery plant has been drawn down by Maloti 135 million (US$ 12.1 million) during the Period.
- In March 2014, Gem Diamondsâ€™ Board of Directors announced its intention to pay a maiden dividend to shareholders based on the 2014 financial year results. The Group remains on track to meet this objective.
Gem Diamondsâ€™ CEO, Clifford Elphick commented:
â€śThe third quarter of 2014 saw continued strong operational performance at LetĹˇeng as well as the opening of the Ghaghoo mine. The two LetĹˇeng tenders conducted during this Period saw an improvement in the dollar per carat prices achieved when compared to the prior quarter.
The official opening of the Ghaghoo mine was an important milestone for the Company. We are pleased to have completed the construction of the mine on time and within budget and to have overcome the challenges posed by developing a decline through some 80 meters of sand. The first sale of the Ghaghoo production will occur in February 2015 to coincide with the first LetĹˇeng sale in 2015.â€ť