Let??eng Sales Fall Amid Lower-Quality Output

RAPAPORT... Gem Diamonds' sales slumped in the fourth quarter as theminer produced fewer valuable stones at its Let??eng mine. Proceeds fell 40% year on year to $41.7 million in the threemonths ending December 31, the miner said Thursday. While sales volume rose 5%to 33,140 carats, the average price dropped 43% to $1,259 per carat, reflecting"lower-quality recoveries" at the lucrative mine in Lesotho. Production fell 3%to 29,523 carats for the period. The fourth-quarter slowdown came despite a strong year forGem Diamonds, with sales up 29% to $266.6 million for 2018. The company uneartheda record 15 diamonds above 100 carats in 2018, compared with seven in 2017,resulting in its average selling price jumping 10% to $2,131 per carat. InJanuary, it found the 910-carat Lesotho Legend, which it sold in March for $40million. "The large-diamond recoveries continued during the [fourthquarter], with three diamonds greater than 100 carats being recovered,resulting in the highest number of these recoveries in a single calendar year,"said Gem Diamonds CEO Clifford Elphick. Recoveries of diamonds weighing more than 20 carats leapedto 257 from 213 the previous year, while nine stones fetched more than $1 million each.Production for the year rose 13% to 126,875 carats. Sales volume grew 17% to 125,111carats. During the fourth quarter, the company sold a 4.06-caratpink diamond for $64,067 per carat - the highest per-carat price itachieved for a stone all year, it noted. The miner expects Let??eng production to fall to between 114,000 and 118,000carats in 2019. It anticipates sales volume will decline to between 115,000 and 119,000 carats. The company has commenced manufacturing of its pilot plant,which will enable early detection of large diamonds and reduce damage fromextraction. The project will be commissioned at the end of the second fiscalquarter. Gem Diamonds' stock fell 5% in early trading following theresults. Image: Rough diamonds. (Gem Diamonds)