London-listed Gem Diamonds recovered 29 010 ct of diamonds from its 70%-owned Letšeng mine, in Lesotho, in the quarter ended March 31, an increase from the 26 110 ct produced in the first quarter of 2020.

Gem sold 26 919 ct of diamonds and generated revenue of $43.9-million. The average price achieved for the period was $1 630/ct.

Five diamonds sold for more than $1-million each, generating revenue of $12.4-million.

“It is pleasing to see that carat production during the period was up some 11% on the same period in 2020 and that the average price of $1 630/ct was also slightly up on the first quarter of 2020.

“Although the production from the mining mix was not as impressive as during the second half of 2020, with fewer large diamonds recovered due to the areas accessed under the mining plan, prices achieved on a like-for-like basis remained strong for Letšeng’s high-value diamond production.

“It is anticipated that the mining mix should improve over the coming months as the richer parts of the Satellite pit are accessed in accordance with the mine plan,” said CEO Clifford Elphick.

Gem ended the period with $26.9-million of cash on hand (excluding $8.2-million of the March tender proceeds received after the period end).

Drawn down facilities amounted to $15.2-million, resulting in a net cash position of $11.7-million at period end.

The group had undrawn and available facilities of $59.6-million at period end.

During the period, Letšeng paid the remaining dividend of $10-million which was declared in 2020. This resulted in a net cash flow of $6.7-million to Gem and a cash outflow from the group of $300 000 relating to withholding taxes and $3-million in respect of the government of Lesotho’s share of the dividend.

During the quarter under review, Letšeng settled its 2020 income tax obligations, resulting in an $11.7-million payment to the Lesotho Revenue Authority.

Gem remains on track to achieve the targeted $100-million in incremental revenue, productivity improvements and cost savings over the four-year period to end-2021.