Gem's rock star mine produces record number of big stones, but prices per carat fall 23%
Gem Diamonds (LON:GEMD) on Thursday reported record annual production at its flagship Letšeng mine in Lesotho and continued to polish its reputation as the world’s richest source of exceptionally large diamonds.
The London-listed company reported in a management statement covering the final quarter of 2001 it recovered 46 rough diamonds at Letšeng worth more than than $20 000 per carat.
In all 184 such diamonds were produced last year, contributing roughly 70% Letšeng's revenue for the full year.
During the December quarter 10 rough diamonds from Letšeng were valued in excess of $1 million each and 168 rough diamonds greater than 10.8 carats in size were recovered.
Letšeng exported a total of 32,353 carats during the fourth quarter, up 32% from the same period a year earlier. However, the average value of the exports for the period was $2,543 per carat, down from $3,291 per carat in Q4 2010.
The Gem board approved Project Kholo in November last year, which will increase Letseng’s production through the construction of a third processing plant. Output is planned to be ramped up to an 10 tonnes per year by July 2014 from the current 5.7 million tonnes a year.
Production from the Ellendale mine in Western Australia region improved significantly according to Gem the property achieved an average price of US$4,269 per carat ($3 482 per carat in Q4 2010) during the period for its fancy yellow diamonds supplied under the long term off-take agreement with Tiffany & Co.
The company's Ghaghoo diamond mine in Botswana is scheduled to deliver first production in mid-2013. Gem has approximately $158 million cash.
MINING.com reported in October, Gem sold the world’s 14th largest white diamond discovered at Letšeng two months ago for $16.5 million in cash. Gem will also share in the profit of any polished diamond cut from the 550 carat Letšeng Star.
Without the occasional large diamond find, the Letšeng pipe would probably be a marginal deposit, but the mine, 30% owned by the King of Lesotho, has also yielded the the 478 carat Light of Letšeng that went for $18.4 million in 2008 and two other big rocks.