Interim Management StatementBack
16 Apr 2012
Gem Diamonds Limited (LSE: GEMD) reports an Interim Management Statement ("IMS") for the Period 1 January to 15 April 2012 ("the Period").
DURING THE PERIOD:
- Project Kholo commenced in January 2012 and is proceeding as planned.
- 28 114 carats were recovered during Q1 2012, up 5.9% from Q1 2011.
- The recovered grade at LetÅ¡eng during Q1 2012 is up 10.6% on Q1 2011.
- Average value of US$1 976 per carat for the three tenders held in the Period.
- An exceptional 155 carat type IIa white diamond was recovered on 6 April 2012.
- 9 rough diamonds achieved an average value in excess of US$1 million each during the Period.
- LetÅ¡eng produced a total of 43 rough diamonds that achieved prices greater than US$20 000 per carat, equivalent to 55% of LetÅ¡eng's revenue for the Period.
- A total of 185 rough diamonds produced greater than 10.8 carats in size in the Period.
- Continued improvement in plant throughput and diamond production following the commissioning of the primary plant feed section of the processing plant.
- Achieved an overall average price of US$1 049 per carat, with its fancy yellow diamonds sold to Tiffany & Co. achieving an average of US$4 326 per carat during Q1 2012.
- Infrastructure work has progressed well with plant construction commencing on 16 April. The advance rate of the decline has however been slower than expected with challenges encountered in advancing through an area of unconsolidated sand.
- Zero 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.
- The Group has US$120.1 million cash as at 31 March 2012, of which US$109.6 million is attributable to Gem Diamonds, following a scheduled US$21 million income tax payment made by LetÅ¡eng during the period in respect of 2011.
Gem Diamonds' CEO, Clifford Elphick commented:
"The LetÅ¡eng resource has exceeded expectations and it is pleasing to note that carat production and grade are both up when measured against the corresponding Period last year. In addition, the Gem Diamonds Price Index (which measures prices for LetÅ¡eng and Kimberley rough diamonds on a like for like basis) is up some 7 percent for 2012, reflecting a continued strengthening of the market for higher end rough diamonds. The LetÅ¡eng expansion project Kholo has commenced and is progressing well.
Ellendale has performed well and carat production and ore mined are significantly ahead of the corresponding Period of 2011. The average price achieved for Ellendale's sales in the Period is more than double that of Q1 2011."