Gem Diamonds has announced its operational and sales figures for Q1 2016, noting a 26% increase in carats sold from its Letšeng Mine in Lesotho compared to Q1 2015 (3 tenders during each period), and a 13% increase in total value, although the achieved price per carat fell 10% from $2,117 to $1,938. Gem Diamonds sold a total of 45,311 carats in Q1 for total sales of $87.8 million. The announcement cites a strong start to the year with production in line with their plan, as they recovered 28,698 carats at the Letšeng Mine during the period, reflecting a 28% increase on the first quarter of 2015.
At its Ghaghoo Mine in Botswana, Gem announced a production slowdown and implementation of a cost reduction plan as their downsizing process advanced. Still, they recovered 47 diamonds greater than 4.8 carats each during Q1, including 3 diamonds larger than 10.8 carats, with the largest being a 12.99 carat diamond. Gem recovered 11,029 carats at Ghaghoo during Q1, a 5% drop YoY, and sold a parcel of 14,114 carats for $ 2.3 million, achieving $160 per carat which is some 7 percent above the previous price achieved in December 2015.
Gem Diamonds' CEO, Clifford Elphick commented: "The prices achieved for Letšeng's top quality and large diamonds have remained steady and have contributed to an average price of $1,938 per carat for the first three Letšeng tenders. At Ghaghoo the downsizing of the operation is advanced and the buffer zone around the sand ingress has been successfully created. Development of the second production block on Level 1 has progressed well and will be the main source of ore for the remainder of the year." Their diamond market overview, reads that positive actions taken by the major diamond producers (i.e. reduced supply, reduction of prices of rough diamonds and concerted consumer marketing efforts) have led to an overall steady sentiment in the diamond market in the first quarter of 2016. Although there have been signs of improvement in the first quarter of 2016, the diamond market as a whole remained cautious. The continued slowdown in Chinese retail demand, a strong US dollar and reports of continued high levels of polished inventory (particularly in the manufacturing sector) have contributed to a cautious approach being adopted in the purchasing of rough and polished diamonds.