Let??eng delivered record number of large diamonds for Gem in 2018 

Relatively stable carat recovery and sales contributed to a strong performance for LSE-listed Gem Diamonds in the fourth quarter ended December 31.

Gem on Thursday reported that it had recovered three diamonds larger than 100 ct at its Letšeng mine, in Lesotho, during the quarter, taking the number of diamonds larger than 100 ct recovered during 2018 to 15 – a record for the company.

The recovery of large diamonds improved markedly during 2018, with 257 diamonds larger than 20 ct recovered. The average number of large diamonds in the nine years prior to 2018 was 218.

While carat recovery for the fourth quarter dipped 17% to 29 523 ct, carat recovery for the year increased by 11% year-on-year to 126 875 ct.

There was also a 9% increase in carats sold in the fourth quarter compared with the previous quarter; however, the average dollar per carat price dropped 32% to $1 259/ct as a result of lower-quality recoveries.

The highest diamond price achieved during the quarter was $64 067/ct for a 4.06 ct pink diamond – the highest price per carat achieved during 2018.

Gem Diamonds sold nine diamonds for more than $1-million each, generating revenue of $14.6-million in the fourth quarter. This meant that 44 diamonds were sold for more than $1-million in 2018, generating revenue of $137.2-million for the year.

The company achieved an average price of $2 131/ct for 2018, up 10% from 2017.

Gem CEO Clifford Elphick noted that the revised mine plan had resulted in a significant reduction in overall stripping ratio owing to steeper slope angles, which is expected to result in a significantly improved net present value for the mine.

Grades for the quarter decreased to 1.70 carats per hundred tonnes (cpht), compared with the previous quarter as a result of lower satellite pipe tonnes treated.

Overall grade for 2018 was 1.94 cpht, owing in part to the Business Transformation initiative to retreat tailings material through a mobile X-ray technology sorting machine.

The machine recovered 11 905 ct in 2018 of which 6 233 ct related to historical (pre-2018) tailings material.

At the end of the fourth quarter, the group had $50.8-million of cash on hand, of which $43.3-million is attributable to Gem.

Letšeng managed to maintain its costs within the expected targets.

Gem will host a full-year results presentation on March 13.