Gem Diamonds shares rise despite third quarter price drop
Gem Diamonds’ share price was up three per cent today despite prices being six per cent lower than in the last quarter.
Achieved prices per carat fell from $1,501 (£1164) to $1,417.
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The leading diamond producer said that it sold 25,631 carats in the third quarter, down 10 per cent from the 28,379 sold in the second quarter.
Revenues of $11m in the period were spearheaded by the sale of five diamonds for more than $1m each.
The company also announced that it had renewed the lease on its Letšeng mine in Lesotho for a further ten years, which is famed for its production of white diamonds.
Gem said that due to a lower contribution from the mine’s Satellite pipe, the number of carats sold would be affected.
Gem Diamonds chief executive officer Clifford Elphick said: “It is pleasing to report that Gem Diamonds has successfully renewed the mining lease for Letšeng with the Government of the Kingdom of Lesotho, and we look forward to continue the shared value creation long into the future.
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“Letšeng’s high-value large diamond production has experienced price pressure during the Period. This, together with diamonds sold from the lower value ore mined in the previous quarter, resulted in an average price achieved of 6% lower than the previous quarter.”
Gem is also in the process of selling its 100 per cent Ghaghoo mine in Botswana, with the deal expected to go through by the year-end.
In March Gem disappointed shareholders today as the firm withheld dividend payments despite a jump in profits after a year when it sold history’s fifth largest gem-quality diamond.
Main image credit: Getty