Gem Diamonds Jumps Back into Black

RAPAPORT... Gem Diamonds returned to profit last year, after thedevaluation of an underperforming mine drove it to a loss in 2016. The miner recorded a net profit of $17.2 million for 2017,versus a loss of $144.1 million in 2016, it said Wednesday. The 2016 loss was mainlythe result of a $170.8 million impairment charge, after the company decided tocease production at the Ghaghoo mine in Botswana due to weak prices. GemDiamonds is currently seeking a buyer for the mine, and intends to focusprimarily on its higher-value Let??eng asset in Lesotho. Much of the miner's financial performance depends on itssuccess in recovering large diamonds. In 2017, revenue rose 13% to $214.3million as it found seven stones above 100 carats, compared with five in 2016,while the average price jumped 14% to $1,930 per carat. Since the start of2018, the company has already recovered seven stones over 100 carats,including, most recently, a 169-carat, white, type IIa stone it unveiledWednesday. "The second half of 2017 saw the company begin to benefitfrom the operational improvements implemented during the year, with asignificant improvement in the recovery of the large diamonds from Let??eng,"said Clifford Elphick, CEO of Gem Diamonds. "The market for the mine's large,high-quality white rough diamonds remained strong over the course of 2017, atrend which has continued into early 2018." The miner recently sold the 910-carat Lesotho Legend - believedto be the fifth-largest diamond in history - for $40 million at tender inAntwerp, after extracting the rough diamond in January.