Lesotho stones lift Gem profit

Just 26 diamonds helped push Gem Diamonds firmly into an interim profit that eclipsed profit for the entire previous financial year.

Just 26 diamonds helped push Gem Diamonds firmly into an interim profit that eclipsed profit for the entire previous financial year, swelling its coffers.

Gem, which is listed in London and operates the Letšeng diamond mine in Lesotho, had a remarkable start to its 2018 financial year, buoyed by the find and sale of the Lesotho Legend, a 910-carat diamond for $40m — the largest found at the mine — and the sale of 25 more gems in excess of $1m each.

Gem’s interim revenue for the six months to end-June shot up 81% to $168m and post-tax profit rose to $41m from $578,000 profit previously. Cash increased to nearly $71m from $48m. Gem achieved an average price of $2,742 a carat in its sales compared to $1,779 a carat in the same period a year earlier. The company mined 61,596 carats compared to 50,478 in the previous period.

“Letšeng produced a record number of diamonds greater than 100 carats for any sixmonth period in the mine’s history, reaffirming the exceptional and unique quality of Letšeng,” said CEO Clifford Elphick.

“Subsequent to June, two further diamonds larger than 100 carats have been recovered, with the latest in August, marking the 12th such recovery for the year. This now positions 2018 as a record for recoveries of diamonds greater than 100 carats in a single year.”

Gem owns 70% of Letšeng, with the Lesotho government holding 30%. Talks are under way with the Lesotho Mining Board to renew its mining lease. Gem is in the process of selling its Ghaghoo mine in northern Botswana, where it has failed to turn the operation to profit.