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Gem Diamonds Profit Falls in 2019

Miner recovered fewer large stones and saw a drop in its average price.
Mar 12, 2020 4:23 AM   By Rapaport News
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Gem Diamonds’ profit dropped last year amid lower large-stone recoveries and a drop in the average price.

Profit for the year fell 77% to $10.6 million, compared with $46.6 million the previous year, the miner said Wednesday. Revenue fell 32% to $182 million, as sales volume declined 11% to 111,292 carats. The average price slid 23% to $1,637 per carat, reflecting the smaller percentage of higher-value recoveries from the Letšeng mine. Production decreased 10% to 113,974 carats.

The miner recovered 11 diamonds weighing more than 100 carats during 2019, as opposed to 15 of that size in 2018. However, those stones mark an important milestone for the company, bringing its total to 100 stones over 100 carats since Gem Diamonds began running the Lesotho mine in 2006.

During the year, the company sold a 13.32-carat pink diamond for $8.8 million, a record price of $656,934 per carat for Letšeng. The highest per-carat price achieved for a white stone in 2019 was $48,255.

The number of diamonds weighing more than 20 carats slipped to 252 versus 257 the previous year. A total of 27 diamonds sold for more than $1 million in 2019, compared with 44 the year before. The 2018 sales included the 910-carat Lesotho Legend, which the company sold for $40 million in March of that year.

Gem Diamonds noted that the coronavirus pandemic could affect its operations.

“The outbreak of COVID-19 impacting trading and financial markets could potentially have an impact on upcoming tenders and availability of imported goods,” the company said. “[The] current focus will include monitoring and mitigating risks associated with this.”

The miner’s stock fell 12% Wednesday following the results. 

Image: A rough diamond from the Letšeng mine in tweezers. (Gem Diamonds)
Tags: Gem Diamonds, Lesotho Legend, Letšeng mine, Rapaport News
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