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Gem nets record 100ct diamond haul

Gem Diamonds (LSE:GEMD) saw diamond recoveries and grade climb at its Letšeng mine in Lesotho in 2018, with a record 15 diamonds over 100 carats recovered during the year.
Gem nets record 100ct diamond haul Gem nets record 100ct diamond haul Gem nets record 100ct diamond haul Gem nets record 100ct diamond haul Gem nets record 100ct diamond haul

Gem Diamonds had a good 2018, with a record 15 diamonds over 100ct recovered at Letšeng in Lesotho

Gem recovered 126,875ct during the year, up 13% from 2017, from 6.5 million tonnes of treated ore, steady, at a grade of 1.94 carats per hundred tonnes, 11% higher than the previous year.

The company's sales of rough diamonds rose 17% year-on-year in 2018 to 125,111ct at an achieved price of US$2,131 per carat, up 10%, with the total value increasing 29% to $266.6 million.

It said it sold 44 diamonds for more than $1 million each, generating revenue of $137.2 million.

Gem Diamonds as a group had $50.8 million of cash on hand at the end of December and a net cash position of $17.5 million.

It drew down $33.3 million of available facilities and had undrawn and available facilities of $57.8 million at December 31.

During the December quarter, Gem said Letšeng paid $17.4 million in dividends, resulting in a net cash flow of $11 million to Gem Diamonds and a cash outflow from the group for withholding taxes of $1.2 million and payment of the Government of Lesotho's share of dividend of $5.2 million.

CEO Clifford Elphick said production in 2018 included a record number of diamonds greater than 20ct recovered in a single year.

"The revised mine plan results in a significant reduction in Letšeng's overall stripping ratio due to steeper slope angles, which is expected to result in a significantly improved NPV of the mine," he said.

"Good progress has been made on the business transformation process which remains on track to achieve its cumulative four-year target of $100 million, with already implemented initiatives expected to deliver $60 million over the four-year target period."

Gem's shares have risen 15.2% in the past year to the current £1.035 (US$1.34) per share, although they've fallen 7.6% since the start of 2019.