Gem Diamonds said its third quarter (ended 30 September) production from its Letšeng mine in Lesotho rose 27% compared to Q2 2018, and the miner has raised its production and sales guidance for the year. Gem Diamonds now anticipates is full-year output to reach 120 to 124 million carats, up from the 114 to 118 million carats announced last March. The announcement follows improved mining efficiencies and strong production during the period. The miner also projects to sell 118,000 to 122,000 carats, up from 112,000 to 116,000 carats announced previously.
During the period, Gem Diamonds recovered two diamonds greater than 100 carats, and after the period had closed, on 15 October, they recoverd a 357-carat diamond, bringing the number of diamonds greater than 100 carats recovered during 2018 to thirteen. Production during the period rose to to 35,755 carats from 28,070 last quarter, increasing 16% year over year, while output for the year reached 97,351 carats by the end of the period.
Quarterly sales fell by 12% comparted to the previous quarter despite a 3% rise in the volume of carats sold. The company attributes the decline to the reduction in average price per carat, which was down 14% to $1,841 per carat compared to the $2,150 per carat earned in Q2 2018. Compared to Q3 2017, the $55.7 million in sales represents a 16% increase as a 17% jump in sales volume to 30,275 carats outweighed a 1% decrease in the average price to $1,841 per carat. During the period, Gem sold eight diamonds for more than $1.0 million each, generating revenue of $21.0 million during the period. During the Q3, the highest diamond price achieved was $60,428 per carat for a 138.20 carat, Type IIa, white diamond.
In line with the miner's innovative strategy of early detection of large diamonds to reduce diamond damage, the company approved a $3 million pilot plant to be constructed at Letšeng. This project employs innovative technology to identify diamonds within kimberlite ore and uses non-mechanical means of liberating the encapsulated diamonds. The plant will be commissioned during Q2 2019. The miner says they remain on track to achieve its cumulative target of US$ 100 million in incremental revenue, productivity improvements and cost savings for the 4-year period to end 2021.