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Gem lifts Q1 production, sales

26th April 2018

By: Anine Kilian

Contributing Editor Online

     

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JOHANNESBURG (miningweekly.com) – LSE-listed Gem Diamonds’ carat recoveries increased by 32% year-on-year to 33 526 ct for the three months ended March 31, compared with the 25 479 ct recovered in the first quarter of 2017.

Carat recoveries also rose by 10% on the 30 560 ct recovered in the December 2017 quarter.

Gem sold 32 412 ct in the March quarter, a 38% year-on-year increase and a 3% quarter-on-quarter increase.

Prices improved by 98% year-on-year to $3 276/ct, which was also 48% higher than the average price of $2 217/ct achieved in the December quarter.

“This is owing to the the improvement in the frequency of large diamond recoveries during the period, with seven diamonds greater than 100 ct recovered in the quarter,” CEO Clifford Elphick said in a statement on Thursday.

Gem Diamond’s 70% owned Lesotho-based Letšeng mine treated 1.3-million tonnes of ore during the quarter, 59% of which was sourced from the main pipe, and 41% from the satellite pipe.

The balance of the ore was treated through the alluvial ventures contractor plant, of which 66% was sourced from the main pipe and 34% from low-grade stockpiles.

The company, meanwhile, said its four-year business transformation target of $100-million remained on track.

Initiatives implemented to date will contribute about $27-million to the four-year target, and comprise $23-million of cumulative recurring benefit and $4-million of one-off savings. 

The company also noted that a formal sales process has started for its 100%-owned Ghaghoo mine, in Botswana, which is on care and maintenance.

During the period, the Lesotho government announced its intention to renew Gem’s Letšeng mining lease until 2034. The mining lease may be further extended if necessary in relation to any underground development of the mine thereafter.

At the end of the quarter, the group had a net cash position of $48.1-million, a
$46.7-million improvement on the previous quarter’s net cash position of $1.4-million.  

Letšeng paid dividends of $16.2-million, which resulted in a net cash flow of $10.2-million to Gem and a cash outflow from the group as a result of withholding taxes of $1.1-million, as well as payment of the government of Lesotho's share of dividend of $4.9-million.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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