Q3 2015 TRADING UPDATEBack
11 Nov 2015
Gem Diamonds Limited (LSE: GEMD) (â€śGem Diamondsâ€ť or the â€śCompanyâ€ť or the â€śGroupâ€ť) is pleased to report a Trading Update detailing the Companyâ€™s operational and sales performance for the Period 1 July 2015 to 30 September 2015 (â€śQ3 2015â€ť) or (â€śthe Periodâ€ť).
Prices firm, costs down and production up
- Revised 2015 production and cost guidance following strong operational performance and cost discipline
- Average price of US$ 2 578 per carat was achieved in Q3 2015
- 13 rough diamonds achieved a value of greater than US$ 1.0 million each , including an exceptional quality 357 carat Type IIa white diamond which achieved US$ 19.3 million on tender
- A total of three diamonds of over 100 carats each were sold in the Period
- Zero Lost Time Injuries (LTIs) at LetĹˇeng for the past 365 days
Grade remains higher than reserve and carat production up
- Average recovered grade of 29.1 cpht (compared to the average reserve grade of 27.8 cpht)
- Five development tunnels being mined, with a further four tunnels being developed
- 115 diamonds greater than 4.8 carats each were recovered during the Period, including 13 diamonds larger than 10.8 carats
- 31 923 carats recovered during the Period, including two blue rough diamonds weighing 2.2 carats and 1.5 carats
- Second parcel sold in July achieving an average price of US$ 165 per carat, bringing the total average US$ per carat achieved for the year to date to US$ 176 per carat
- Zero LTIs at Ghaghoo for the past 365 days
- Group cash on hand of US$ 86.1 million cash as at 30 September 2015, of which US$ 72.0 million attributable to Gem Diamonds
- Group has drawn down US$ 32.1 million of its available facilities, resulting in net cash position of US$ 54.0 million
- During the Period, LetĹˇeng paid dividends of US$ 20.2 million, which resulted in a net cash flow of US$ 12.7 million to Gem Diamonds and a cash outflow from the Group as a result of withholding taxes of US$ 1.4 million and payment of the Government of Lesothoâ€™s dividend portion of US$ 6.1 million.
Gem Diamondsâ€™ CEO, Clifford Elphick commented:
â€śIt is pleasing to see that the prices achieved for LetĹˇengâ€™s diamonds during the third quarter have remained robust despite the challenging market conditions experienced throughout this Period. The large high quality diamonds, for which LetĹˇeng is renowned, have contributed to a strong Q3 2015 average price of US$ 2 578 per carat.
LetĹˇeng has also delivered a strong operational performance, with ore treated, grade and carat recoveries ahead of those of the previous quarter and expected to exceed original full year guidance.
Ghaghoo continues its ramp up, with ore treated and carats recovered up over 30% on the previous quarter. The Ghaghoo production faces a very challenging market at present.â€ť