Gem and Diamond

Gem upbeat on future prospects for Letšeng and the company

Gem upbeat on future prospects for Letšeng and the company
Mining News Pro - Diamond miners Gem Diamonds delivered solid operational results for the year ended December 31, which, together with the targeted gains of a business transformation programme and continued emphasis on cost controls, affirmed it as one of the lowest-cost producers in the industry, CEO Clifford Elphick said on Wednesday.
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According to Mining News Pro - The operational results were characterised by the achievement of all guided operational metrics and the recovery of 11 diamonds greater than 100 ct each, which also brought the total number of diamonds of greater than 100 ct recovered at the Letšeng mine, in Lesotho to 100.

“This, together with a 13.32 ct pink diamond that was recovered and sold for a Letšeng record of $656 934 /ct, reaffirms the unique quality of the Letšeng production,” enthused Elphick.

Also, the Letšeng mining lease has been renewed for an effective 20-year period which creates long-term stability for Letšeng.

With the renewed lease, the royalty rate on diamond sales increased from 8% to 10%, while a higher number of work permits may be granted.

“This [long-term stability], together with the continued emphasis on cost controls, positions the company well for an upturn in the market for Letšeng’s quality production which appears to have begun,” Elphick assured shareholders.

For the period, Gem recorded revenue of $182-million; underlying earnings before interest, taxes, depreciation and amortisation from continuing operations of $41-million; profit for the year from continuing operations of $15-million; and earnings a share from continuing operations $0.05.

During a webcast, the company indicated that while it is unclear what the impact of the coronavirus will be in the long term, it has taken short term measures pertaining to the health and safety of employees at the mine, as well as to ensure business continuity.

Most importantly, for the former, the company has access to private facilities for quick turnaround times for testing to see if any workers are affected.

It is also far along with the process of analysis its supply chain, to see where suppliers originate from, to discern whether measures need to be put in place to minimise business interruption.

It will continue to monitor the situation, especially in the US, which is the largest diamond market.


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