Gem Diamonds: Sales are Down, But Prices and Earnings are Up in Q1

Gem Diamonds produces large white diamonds and fancy color goods. Some are so valuable that the company purchased and polished a number of the diamonds mined at Letšeng

In the first quarter of 2010, Gem Diamonds sold 47,754 carats of rough at an average price of $898.35 per carat, a 73.3 percent decline in the volume of sales and a 315.9 percent leap in prices. The jump in prices helped the company increase sales by 10.9 percent to $42.9 million.

The Letšeng mine in Lesotho sold 15,468 carats of rough averaging $1,753 p/c, a 30 percent decline in the volume of sales and a 72 percent jump in prices. The price increase propelled total sales by 20 percent to $27.1 million, the company reported in an interim management statement.

Twelve diamonds from Letšeng sold for more than $20,000 p/c, including a 33.87 carat diamond which sold for $53,484 p/c and 57.24 carat diamond which sold for $49,552 p/c.

Letšeng, known for its large size clear diamonds produced about 100 rough diamonds greater than 10.8 carats during the quarter.

Ellendale in Australia was source of 32,286 carats, sold at an average price of $489 p/c. The average value of the Ellendale’s goods last year was just $102 p/c.

The mine’s sales included 4,652 carats of fancy yellow diamonds that were sold to Tiffany & Co at an average of $2,545 p/c.

At Gope in Botswana, the company now believes that the total contained resource carats have increased by 1.2 million carats to 20.5 million carats. This is due to an increase in grade from new statistical modeling and an increase in volume through re interpretation of drilling results. The average resource diamond price has increased by 19 percent to $162 p/c.

The company found two blue diamonds in existing diamond samples during the valuation work.

Gem Diamonds is currently considering its options with regard to the Cempaka mine in Indonesia and the Chiri project in Angola, which remain on care and maintenance.