Mining Journal > Finance > Stockpile: Gem Diamonds on a high as sales stay strong

Strong quarterly sales provided Gem Diamonds Ltd with a healthy boost on the London market this week.

The southern Africa focused miner achieved record prices for its diamonds from Letseng in Lesotho, guiding the company's share price to a gain of more than 9%.

The firm sold stones worth US$80.7 million from the mine, an increase of 62% on the comparable period a year earlier. The average price of US$3,291/ct was a 74% increase, while total sales reached US$190.3 million.

Irish miner Kenmare Resources plc moved 9% ahead after recently reporting it had increased production from the Moma mine in Mozambique in the second half of 2010.

Output of ilmenite (the primary ore mined at Moma) was 12% higher, zircon rose by 21% and production of rutile jumped 147%.

Coal miner New World Resources NV had an up-and-down week which saw it push close to a 52-week high before dropping back sharply.

In the aftermath of the severe flooding in Queensland, New World’s value benefitted by estimates of a substantial loss in Australian exports and improving coal prices.

In the first week of 2011, New World added 12% in London (the week’s top gainer) as prices for coking coal started their surge.

However, New World fell almost 8% on January 28 after releasing a trading update. Despite this, the company still managed a 4% advance for the period.
The drop was reportedly due to speculation that a rising proportion of poorer quality coal in the Czech company’s output would hurt earnings.

Meanwhile, most of the gold miners have struggled as the value of the precious metal continued to drift downwards.

One exception was Petropavlovsk, which had a minor gain following the release of fourth quarter results and 2011 estimates. The Russian miner has forecast output will increase 18% this year after missing its guidance targets in 2010 due to weather issues and late deliveries of equipment.

There wasn’t much fluctuation from the majors, with Rio Tinto adding 2% and Xstrata shedding 3% the most notable movements.

On AIM, Churchill Mining plc was the top gainer, rising 22% on reports that the company was talking with Indian power companies about a possible thermal-coal project in Indonesia.

The company, which is already developing the East Kutai project in the south-east Asian country, responded to the movement by saying it was in discussions about what options it had to move the existing project forward.

Horizonte Minerals plc signed an agreement with Lara Exploration Ltd to buy the Vila Oita and Floresta nickel laterite projects in exchange for 8.5 million new shares. The announcement pushed Horizonte up 15%.

Highland Gold Mining Ltd rose 11% on the back of matching its production guidance for 2010. The company added that output would gain another 10% in 2011 to reach between 210,000 and 220,000oz.

Others to make significant improvements included Landore Resources Ltd and Mwana Africa plc, with gains of 13% and 9% respectively.

Kefi Minerals took the biggest hit on the AIM market with a fall of more than 30%. The gold and copper explorer reported late in the week that it had lodged 21 exploration licence applications in Saudi Arabia with joint venture partner Abdul Rahman Saad Al-Rashid and Sons.

Australia’s Thor Mining plc lost more than 18% after saying it would acquire up to an 80% interest in the 274,000oz Spring Hill gold project in the Northern Territory. Thor will make the acquisition in two stages from Western Desert Resources Ltd.

Others to suffer falls this week included Nyota Minerals Ltd and Forte Energy NL, both dropping about 16%.