Interim Management StatementBack
15 Nov 2013
Gem Diamonds Limited (LSE: GEMD) (â€śGem Diamondsâ€ť, the "Groupâ€ť or the â€śCompanyâ€ť) reports an Interim Management Statement (â€śIMSâ€ť) for the Period 1 July to 14 November 2013 (â€śthe Periodâ€ť).
During the Period:
LetĹˇeng continues to demonstrate its strength as a world class producer of high value diamonds:
- 25 559 carats recovered in Q3 2013, up 9% on Q2 2013.
- Continued indication that the new cone crushers are having a positive impact on recoveries.
- An average value of US$ 2 022 per carat was achieved for the 2 exports in Q3 2013 (US$ 1 855 per carat in Q2 2013 and US$ 1 741 per carat in H1 2013).
- The October and November 2013 exports achieved an average of US$ 2 139 per carat and US$ 2 406 per carat respectively.
- 13 rough diamonds achieved a value in excess of US$ 1 million each during the Period, totalling 22 for the year to date.
- 26 rough diamonds produced which achieved prices greater than US$ 20 000 per carat in the Period (totalling 78 for the year to date).
- A total of 178 rough diamonds greater than 10.8 carats in size were recovered in the Period, equating to 77% of LetĹˇengâ€™s revenue for the Period. (476 diamonds greater than 10.8 carats have been recovered for the year to date, totalling 73% of LetĹˇengâ€™s revenue for the year to date).
- In July 2013 a 99.87 carat diamond sold for US$ 6.5 million, US$ 64 631 per carat; in September 2013 a 98.29 carat diamond sold for US$ 4.7 million, US$ 52 077 per carat; and in October 2013 a 12.47 carat blue diamond sold for US$ 7.5 million, a LetĹˇeng record of US$ 603 047 per carat; and an 83 carat white diamond sold for US$ 4.8 million, US$ 59 173 per carat; and in November 2013 a 73.37 carat white diamond sold for US$ 43 766 per carat and a 32.41 carat white diamond sold for US$ 53 039 per carat.
Good progress at Ghaghoo, which offers strong growth potential:
- The decline tunnel continues to progress well through the competent basalt with 306 meters of basalt tunnelling completed as at the end of October. (As at the end of October 2013 a total of 765 meters of underground development was achieved).
- Construction of the Plant is complete, with commissioning planned to be complete early in Q2 2014; well ahead of a sustainable feed of run of mine ore becoming available from underground.
- 3 Lost Time Injuries (LTIs) have occurred in the Group for the year to date.
- Zero major stakeholder and environmental incidents have occurred year to date.
- Continued implementation of international best practice regarding environmental and social responsibility.
- The Group maintains its strong cash position with US$ 63.6 million cash as at 31 October 2013, of which US$ 56.3 million is attributable to Gem Diamonds. (US$ 61.5 million as at 30 June 2013, of which US$ 55.6 million was attributable to Gem Diamonds).
- As at Period end no draw-downs have been made on either of the US$ 20 million or Maloti 250 million (US$ 25 million) facilities.
Gem Diamondsâ€™ CEO, Clifford Elphick commented:
"We continue to see a strong performance at LetĹˇeng with the recovery and sale of 13 exceptional LetĹˇeng diamonds which achieved prices in excess of US$ 1 million each, totalling US$ 42.6 million in the Period and the gradual move from the lower value main pipe into increasing tonnages of higher value Satellite pipe ore. We are continuing to look at opportunities to improve operating efficiencies at LetĹˇeng. In line with this, the installation of the new cone crushers is complete and we believe that this will enable us to better harness the value of the LetĹˇeng mine as we look to reduce diamond breakage. The development of the new mine at Ghaghoo is progressing well and is on track for the first production to be run through the Plant in H2 of next year as we focus on building our production profile in the longer term and deliver on our growth ambitions."