Gem and Diamond

Gem lowers full-year production guidance

Gem lowers full-year production guidance
Mining News Pro - Gem Diamonds, which operates the Letšeng mine, in Lesotho, has lowered its production guidance for the full-year to December 31 to between 110 000 ct and 114 000 ct, compared with the previously guided 123 000 ct to 127 000 ct.
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The diamond miner noted in a trading update to shareholders on October 28 that the processing plants at Letšeng had experienced a number of interruptions and unplanned downtime during the third quarter of the year as a result of a breakdown of the jaw crusher in the primary crushing area (PCA), unplanned failures of key mainstream units at both plants, extreme weather conditions and intermittent external power outages and lost shifts as a result of cross-border travel limitations owing to Covid-19.

"Although these issues have now been addressed, the negative impact on tonnes treated during the third quarter has resulted in revised guidance, with a reduction of carats recovered and carats sold.

"The lower volumes have also consequently impacted on unit costs per tonne. Waste stripping for the remainder of the year will be reduced in line with the lower treated tonnes required.
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"Capital expenditure (capex) has also been reduced following the deferment of the replacement of the PCA to 2022," the company noted.

Gem now expects to sell between 103 000 ct and 107 000 ct of diamonds for the full-year, compared with the previously guided 119 000 ct to 123 000 ct.

Capex is now guided at $6-million to $8-million, compared with the previous guidance of $14-million to $15-million.

THIRD-QUARTER PERFORMANCE
For the third quarter ended September 30, Gem recovered 23 435 ct of diamonds. That takes recoveries for the year-to-date to to 82 266 ct, which is 14% higher than the 72 403 ct recovered in the nine months to September 30, 2020.

Gem has sold 84 906 ct at an average price of $1 782/ct for the nine months to September 30.

During the third quarter, Gem sold 29 782 ct at an average price of $1 589/ct. Six diamonds sold during the quarter fetched for more than $1-million each.

"During the quarter, diamonds recovered were of a relatively lower quality for Letšeng's normal run-of-mine production.

"Notwithstanding that, prices achieved for these goods were strong, reflecting the continued good demand and market prices paid for Letšeng category diamonds," commented CEO Clifford Elphick.

He added that more than 85% of the Letšeng employees have been fully vaccinated against Covid-19.


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