Gem Diamonds Limited has provided a Trading Update detailing the Group’s operational and sales performance for the Period from 1 July 2018 to 30 September 2018 or Q3 2018.
During the period, Letšeng mine recovered two greater than 100 carat diamonds while after period end, on 15 October, a 357-carat diamond was recovered, bringing the number of diamonds greater than 100 carats recovered during 2018 to thirteen. The company also recovered 35 755 carats during the period, up 27% from Q2 2018. Eight diamonds were sold for more than US$ 1.0 million each, generating revenue of US$ 21.0 million during the period.
In terms of production, Letšeng treated a total of 1.5 million tonnes of ore during the period, 54% of which was sourced from the Main pipe and 46% from the Satellite pipe. The remaining balance of the ore was treated through the Alluvial Ventures contractor plant. Waste stripping continued in line with the requirements of the long-term mine plan.
Following the successful replacement of the scrubber shell and other significant maintenance during the major shutdown in Plant 2 during Q2 2018, plant utilisation and availability returned to nameplate capacity resulting in increased tonnages treated for the period.
Gem Damonds also revealed that the statutory negotiation process relating to the renewal of the Letseng Mining Lease is continuing with the Lesotho Mining Board and updates will be provided in due course.
On its Botswana operation, the company noted that the formal sale process for the Ghaghoo mine continues; further updates will be provided in due course.
From the financial perspective, at the end of the period, the Group had US$ 73.0 million of cash on hand of which US$ 57.9 million is attributable to Gem Diamonds. The Group’s net cash position was US$ 36.2 million (of which US$ 25.3 million was attributable to Gem Diamonds). US$ 36.8 million of available facilities had been drawn down, resulting in undrawn and available facilities of US$ 56.8 million.
Gem Diamonds’ CEO, Clifford Elphick said Letšeng delivered solid production figures for the ‘period with an increase in tonnes treated and carats recovered of 26% and 27% respectively compared to the previous period. “Post period-end, the thirteenth diamond greater than 100 carats for 2018 was recovered, resulting in the highest number of these recoveries in a single calendar year.”
“The results of the proof of concept trials to identify and liberate diamonds within kimberlite ore have progressed well and this technology will now be tested on site at Letšeng as part of a pilot project.
The business transformation process has maintained momentum and remains on track to achieve its cumulative 4-year target of US$100 million in incremental revenue, productivity improvements and cost savings by the end of 2021.”