JOHANNESBURG (miningweekly.com) – LSE-listed Gem Diamonds’ output for the first quarter of 2013 fell by 38% to 18 775 ct, compared with the 30 181 ct in the fourth quarter of 2012, mainly owing to the lower quality diamonds mined at the Letšeng mine during the quarter.
The average grade recovered in the first quarter of the year was 1.27 carats per hundred tons (cpht), compared with a grade of 1.85 cpht in the previous quarter.
“As anticipated, this quarter was in line with our reduced expectations for grade and quality. Throughput was relatively low, albeit planned.
“As communicated previously, mining at Letšeng this year has been restricted to the lower grade and lower value section of the main pipe. Mining will return to the higher value satellite pipe at the end of the second quarter of this year. It is anticipated that this will result in improved revenues for the remainder of 2013,” CEO Clifford Elphick noted in an interim management statement on Wednesday.
Despite only resuming mining in the higher grade satellite pipe in the second half of the year, Gem Diamonds was also confident of meeting its production guidance of between 115 000 ct and 130 000 ct for 2013.
Meanwhile, the volume of diamonds sold increased by 3.1% quarter-on-quarter to 29 205 ct sold in the three months ended March, compared with the 28 324 ct sold in the December 2012 quarter.
The average value per carat sold, however, decreased by 6.1% to $1 599/ct, compared with $1 703/ct in the previous quarter.
Six rough diamonds were sold for in excess of $1-million each during the three tenders held during the quarter, while 24 rough diamonds achieved selling prices greater than $20 000/ct.
Project Kholo
Gem further reported that the installation of the new secondary crushers for Plant 1 and Plant 2 at Letšeng was under way and on track for completion by the second quarter.
The new crushers were expected to contribute towards significantly reducing diamond damage and improving revenues.
This formed part of the company’s $280-million Project Kholo expansion project, which was, when it was launched in 2011, aimed at increasing the yearly treatment capacity of the Letšeng mine to ten-million tons.
However, in December 2012, the diamond miner scaled back the expansion programme, with only some elements being implemented.
Gem noted that work was ongoing to revise the Project Kholo implementation options, production levels and waste-stripping profiles. The company would provide shareholders with indicative costs, timelines and updates in the second quarter of the year.