Gem Diamonds Limited (LON:GEMD) has announced the recovery of a 114 carat, D colour Type II diamond of exceptional quality from the Letšeng mine in Lesotho.
The Letšeng mine is well-known for the production of large, top colour, exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world.
Since Gem's acquisition of Letšeng in 2006, the mine has produced four of the 20 largest gem-quality white diamonds ever recorded.
The group owns 70% of the Letšeng mine and 100% of the Ghaghoo mine in Botswana.
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In a note to clients today highlighting the new diamond discovery, ‘house’ broker Shore Capital said: “We expect that management will have heaved a big sigh of relief – hopefully, this marks the end of the recent prolonged period of ‘paucity’ of large high-value diamonds, which saw 2016 revenues take a 25% hit and resulted in the company’s shares trading at all time lows.”
Meanwhile, fellow broker FinnCap reiterated a ‘buy’ rating on Gem in a note today, but has reduced its target price to 150p from 185p to 150p.
Its analyst Martin Potts said the target cut comes after “taking into account the results from recent diamond sales, the new mine plan and current exchange rates.”
In early trading, Gem shares were up 4.5%, or 4p to 93.25p.
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