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Gem Diamonds shares lower after diamond production dips slightly

Production continued to disappoint in the second quarter

Unpolished diamond
Gem Diamonds said it achieved an average price of US$ 2,385 per carat at a recent tender which closed mid-July

Gem Diamonds Limited (LON: GEMD) shares were lower after saying it recovered 50,478 carats during the first half to end June, down 1% from 50,825 carats in the corresponding period the previous year.

In afternoon trading, Gem Diamonds shares were down 1.53% to 81.50p

In a statement, Gem Diamonds said its Letseng diamond mine in Lesotho achieved an average price of US$1,779 per carat for the period, up 20% from US$1,480 per carat in H2 2016.

Gem Diamonds added that it  achieved an average price of US$ 2,385 per carat at a recent tender which closed on 19 July 2017.

According to Liberium: "Management expect to hit the low end of guidance but this will require a solid operational result in the second half on our estimates," 

Shore Capital, meanwhile, noted that production continued to disappoint in the second quarter.

It added in a research note that: "Ore treated continued to be lower than planned in Q2 2017, as plant availability issues reported in Q1 2017 continued to have an adverse impact."

Gem Diamonds' CEO, Clifford Elphick said: "The market for Letšeng's high-quality diamonds has remained firm over the period with the last tender of the period achieving over US$2,200 per carat. This positive trend has continued with the most recent July tender achieving an average price of US$ 2,385 per carat."

He added that : "A Group-wide, externally supported cost efficiency and bench-marking review has commenced and has already identified opportunities that are being actively pursued. Further progress on this review will be reported on during Q4."

 

Quick facts: Gem Diamonds Limited

Price: 52.3 GBX

LSE:GEMD
Market: LSE
Market Cap: £72.69 m
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