Gem Diamonds, the junior miner developing a diamond mine in the Central Kalahari Game Reserve says it is happy at the progress made at the plant although there are still difficulties because of the encounter with hard material on the way.

In an Interim Management Statement for the Period 1 July to 11 November 2012, the company explains tunnelling operations re-commenced in September 2012 although progress remains slow due to unforeseen hard material being encountered.

However, it says: “It is pleasing to see good progress at Ghaghoo with the erection of the plant and mill progressing well and with the tunnel construction resumed and progressing – albeit at a slower rate than expected due to the adverse ground conditions encountered.”

Gem Diamonds has been encountering problems at the site firstly because of the soil over-burdens and a disaster in which two contractors lost their lives. This has delayed the recovery of diamonds from 2013 to 2014.

The update reveals an average value of US$1 673 per carat was achieved for the 2 exports in Q3 2012 (US$ 2 426 per carat in Q3 2011) at the Letšeng operation in Lesotho with a total of 180 rough diamonds greater than 10.8 carats in size were produced (171 in the corresponding Period in 2011).

The Ellendale operation registered a strong operational performance with 41 680 carats recovered in Q3 2012 (up 28% on Q3 2011).

Gem Diamonds’ CEO, Clifford Elphick says the diamond mining industry continued to experience rough price headwinds during the Period from the ongoing global financial turmoil and uncertainty.

“However from October 2012, rough prices have begun to show a more positive trend.

Severe and prolonged winter snow conditions at Letseng have impacted upon carat production for the Period. YTD carat production remains ahead of the corresponding Period for 2011. Carat production at Ellendale is up 28% over the corresponding Period in 2011,” he says.