Gem Diamonds Lowers Full-Year Outlook

RAPAPORT... Gem Diamonds has reduced its sales guidance for the year, asa problem with its high-value satellite pipe has forced it to mine from thelower-value portion of its Let??eng mine in Lesotho. The miner now expects to sell between 111,000 and 113,000carats compared to the 115,000 to 119,000 it had previously stated in March.Although it will increase the amount of ore treated, and has not changed itsexpected output, the rough will contain a larger proportion of smaller,lower-quality stones from Let??eng's main pipe. Sales of rough diamonds fell 35% year on year in the third quarter to $36.3 millionby value, and dropped 15% to 25,631 carats by volume, in the third quarter, theminer said Tuesday. The average price declined 23% to $1,417 per carat,compared with $1,841 per carat in the same period a year ago. Production at Let??engfell 23% to 27,539 carats. "Let??eng's high-value large-diamond production hasexperienced price pressure during the period," said Gem Diamonds CEO CliffordElphick. "This, together with diamonds sold from the lower-value ore mined inthe previous quarter, resulted in an average price achieved of 6% lower thanthe previous quarter." The company found four diamonds larger than 100 carats inthe three months ending September 30, compared with two duringthe same period a year ago. The highest per-carat price the company achieved duringthe period was $37,408 for a D-color white diamond, it noted. Some fivediamonds fetched more than $1 million each, generating revenue of $11 millionduring the quarter. Image: The Let??eng mine. (Gem Diamonds)