Gem Diamonds, the emerging diamond producer says the quality of diamonds produced at its local mine since commissioning is within estimates. The London Stock Exchange (LSE) quoted group owns Ghaghoo diamond mine in the Central Kalahari Game Reserve (CKGR), which went commercial two months ago.
“The first diamonds produced during commissioning of the plant have, as anticipated, been higher than the quality and average size than those mined during exploration phase,” said group chief executive Clifford Elphick. The company, which bought the mine site from De Beers in 2007, said so far 2400 carats of diamonds have been recovered. From this number, a 20 carat and two 10 carats have been recovered.
The recovery has given the group hope of increased revenue when sale starts delete in the coming months. Located 160 kilometres away from Lephepe, Ghaghoo mine is expected to produce just over 200 000 carats per annum. They are on track as of now, Elphick disclosed in the company’s interim results to June 2014.
“It is not anticipated that there will be any impact on planned production targets for 2015,” added Elphick who will grace the official opening of the mine by President Ian Khama early September 2014. Gem Diamonds is expected to sell carats from the above mine before the year-ends. The company will be joining other independent diamond producers such as Lucara, Firestone Diamonds and Kimberly Diamonds.
However, Firestone has decided to sell its BK11 mine to the highest bidder. Kimberly Diamonds will restart production at Lerala mine in the coming months. Meanwhile, the Gem Diamonds operation in Lesotho has performed well during the first six months of the year. Carats recovered from Letseng were up 29 percent to close at 54, 678 carats (42 268:H1 2013). Average value of one carat also increased by 58 percent to close the period under review at $2747.
“The first half of 2014 was a very strong start to the year for Gem Diamonds with an exceptional performance at Letseng,” said the group chief executive. The ongoing focus on low capex, value accretive projects, resulting in increased diamond liberation and reduced diamond damage have been implemented at Letseng and are bearing fruit. The group has also increased its cash position to a Group cash balance of $114 million that is significant given the board’s stated intention of considering paying a maiden dividend for the 2014 year.