98-Carat Diamond Found at Lesotho Mine

98-Carat Diamond Found at Lesotho Mine

London–Gem Diamonds’ recovery of larger diamonds from the Letšeng mine in Lesotho has picked up a bit, with the mining company finding two fairly big pieces of rough this month.

On May 3, Gem Diamonds recovered an 80.58-carat D color Type II diamond from the mine.

On May 23, it announced the recovery of an even bigger stone–a 98.42-carat diamond of the same quality. (Type II diamonds contain no nitrogen or boron impurities and are the most pure diamonds, chemically speaking.)

The mining company will sell both diamonds in June.

The announcement of the recovery of the 98-carat diamond came as the company provided its trading update for the first quarter ended March 31.

During that period, Gem Diamonds, which owns a 70 percent stake in the Letšeng mine in Lesotho and 100 percent of the currently mothballed Ghaghoo mine in Botswana, reported that it sold 39,950 carats of diamonds for a total of $65.4 million in the first three tenders of 2017.

That’s an average per-carat price of $1,636, up 13 percent from the $1,444 per carat achieved in Q4 2016.

Eleven diamonds went for more than $1 million each, generating revenue of $20.4 million.

This includes an 8.65-carat pink diamond that sold for $1.4 million or $164,855 per carat. That is the sixth-highest price Gem Diamonds has gotten for a Letšeng diamond.

The company also sold the 114.38-carat Type II, D color diamond found in April into a partnership.

In the first quarter, the company recovered 25,479 carats of diamonds, down 4 percent from the fourth quarter 2016 and 11 percent from the same period last year.

The pick-up in recovery of larger stones is good news for the London-based miner that’s sole current operating mine depends on the recovery of big, valuable stones that fetch a high per-carat price. (By comparison, larger diamond mining companies with multiple operations of varying qualities, like De Beers, will sell millions of carats in a quarter but achieve a lower price per carat.)

Last year, Gem Diamonds lost money, with the drop in the number of diamonds over 100 carats recovered impacting cash flow and revenue.

Commenting on the first quarter results, CEO Clifford Elphick said, “Letšeng has recovered larger, better quality diamonds during the period, and it is encouraging that during April and May, there was a notable improvement in the size and quality of diamonds recovered at Letšeng with the dollar per carat achieved trending positively. The market for Letšeng’s high quality diamonds has remained firm over the period and this is anticipated to continue.”

As previously announced, geologist and former Rio Tinto executive Harry Kenyon-Slaney will become the chairman of Gem Diamonds on June 6, replacing the retiring Roger Davis.

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