LSE-listed Gem Diamonds has announced its Full Year Results for the year ending 31 December 2019.
Commenting on the results, Clifford Elphick, CEO of Gem Diamonds, says:
“Gem Diamonds delivered solid operational results which together with the targeted gains of the Business Transformation programme and continued emphasis on cost controls, confirmed our status as one of the lowest-cost producers in the industry.”
“The operational results were characterised by the achievement of all guided operational metrics and the recovery of 11 diamonds greater than 100 carats each, which also brought the total number of diamonds of greater than 100 carats recovered at the Letšeng mine to 100.
“This, together with a 13.32 carat pink diamond that was recovered and sold for a Letšeng record of US$656 934 per carat, reaffirms the unique quality of the Letšeng production.
“The Letšeng mining lease was renewed for an effective 20-year period which creates long-term stability for Letšeng.
“This, 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.”
- Revenue of US$182.0 million (US$267.3 million in 2018)
- Underlying EBITDA from continuing operations of US$41.0 million (US$87.7 million in 2018)
- Profit for the year from continuing operations US$15.0 million (US$52.4 million in 2018)
- Attributable profit from continuing operations US$7.1 million (US$31.7 million in 2018)
- Earnings per share from continuing operations 5.1 US cents (22.9 US cents in 2018)
- Cash on hand of US$11.4 million as at 31 December 2019 (US$9.2 million attributable to Gem Diamonds)
Operational results at Letšeng
- Carats recovered of 113 974 (126 875 carats in 2018)
- Waste tonnes mined of 24.0 million tonnes (25.8 million tonnes in 2018)
- Ore treated of 6.7 million tonnes (6.5 million tonnes in 2018)
- Average value of US$1 637 per carat achieved (US$2 131 in 2018)
- Eleven diamonds larger than 100 carats each recovered (fifteen in 2018)
- The highest dollar per carat achieved for a white rough diamond during the year was US$48 255 per carat
The signing of the new mining lease in October 2019 secures Gem Diamonds’ mining right at Letšeng until 2039.
The new lease sees the royalty rate on diamond sales increase from 8% to 10%, shareholding in the mine remain unaltered (Gem Diamonds at 70% and Government of the Kingdom of Lesotho at 30%) and an increase in the number of work permits that may be granted.
Technology and innovation
With the construction of the pilot plant Gem Diamonds has made progress on the identification, validation and testing of technologies from various industries to complement its innovation drive of early detection and non-mechanical means of liberating diamonds.