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Wednesday, February 3, 2021 - 12:08:14 AM
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Mining News Pro - Africa-focused Gem Diamonds ended 2020 in much better shape than many of its peers as it recorded revenue growth driven mostly by a sharp recovery in prices and sales during the second half of the year.
The miner saw sales rise 4% to $189.2 million for the year, it said on Tuesday. The average price jumped 17% to $1,908 per carat, up from $1,637 per carat achieved in 2019. That outweighed an 11% decline in sales volume to 99,172 carats.
Gem Diamonds said that in the last three months of 2020 it found four diamonds greater than 100 carats, bringing the total for the year to 16. It sold 10 of those diamonds for more than $1 million each in the fourth quarter, generating revenue of $22.6 million.
The total number of diamonds sold for over $1 million each reached 34 last year, it said.
“The prices achieved on a like-for-like basis are higher than those realised in the pre covid-19 market conditions of the first quarter of 2020,” CEO Clifford Elphick said in the media statement.
“This, together with the continued proactive cost control and cash preservation measures implemented across the group, has resulted in an increased positive cash flow for the group during a most difficult time for the diamond industry,” Elphick said.
The company ended the fourth quarter of 2020 with net cash of $34.2 million, up from $1.1 million at the end of the prior quarter.
Shares in Gem Diamonds were sharply up and down on Tuesday after the announcement, trading about 2% higher in London to 51.2p by mid-afternoon. The stock has climbed 34% over the past three months.
The company recently announced its iconic Letšeng mine in Lesotho remained fully operational during a 14-day lockdown the country imposed to curb an alarming spike in covid-19 cases and deaths.
Rough diamond production hit a 30-year low last year and, according to Dmitry Glushakov, Head of Metals & Mining Research at VTB Capital, there are no signs of a pick-up in 2021.
Against VTB Capital’s expectations of a recovery, global rough diamonds production was down 28% to 24 million carats in the last quarter of 2020.
The investment arm of VTB Group, one of Russia’s largest banks, estimates that global rough diamond output was down 19% last year to 112 million carats. It expects 2021 production to be little changed as the full depletion of the Argyle mine fully offsets the yearly production pick-up at De Beers and Alrosa, the world’s largest diamond producers.
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https://www.miningnews.ir/En/News/610318
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