(Kitco News) - Gem Diamonds (LSE: GEMD) announced today that in H1 2022, the company recovered 55,157 carats (H1 2021: 58,831 carats) and sold 57,075 carats (H1 2021: 55,123 carats).
The company said that the decrease in volume of recoveries is due to the reduced contribution from the higher-grade Satellite pit compared to H1 2021, and lower tonnes treated in May and June due to operational challenges, primarily severe weather conditions and more frequent disruptions in grid electricity supply.
According to the company’s statement, strong demand and robust prices achieved for Letšeng's diamonds reflected the continued positive sentiment in the diamond market, with average price of US$1,745 per carat achieved in H1 2022 (H1 2021: US$1,886 per carat).
The company also reported that its revenue decreased by 4% to US$100.0 million (H1 2021: $104.5 million).
This, together with the extraordinary increases in operating costs, most notably diesel prices and explosive consumables, resulted in a decrease in underlying EBITDA from continuing operations to US$20.9 million (H1 2021: US$34.7 million), with attributable profit decreasing to US$3.8 million (H1 2021: US$9.3 million), resulting in earnings per share after discontinued operations of 2.6 US cents (H1 2021: 6.6 US cents), it added.
Commenting on the results, CEO Clifford Elphick said, "The financial results during the period reflect continued strong demand for Letšeng's high-quality rough diamonds. A solid operational performance has been achieved despite exceptionally high rainfall over the period to April and grid electricity interruptions which have necessitated increased reliance on diesel power generation resulting in cost increases as well as supply chain disruptions from adverse global events."
Gem Diamonds is a leading global diamond producer of large high value diamonds. The company owns 70% of the Letšeng mine in Lesotho and is currently in the process of selling its 100% share of the Ghaghoo mine in Botswana.
The company noted that the Letšeng mine is famous for the production of large, exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world.
