Botswana’s newest diamond mine, Ghaghoo will sell 10,000 carats of its first production in Gaborone this month, adding stimulus to the city’s transformation into a global premium rough buying centre.
Located in the Central Kalahari Game Reserve (CKGR), Ghaghoo Mine is still in the commissioning stage after it was officially opened last September.
In a trading update released yesterday, promoters of Botswana’s first underground mine, Gem Diamonds said that a total of 10,167 carats were recovered during commissioning period up to year-end.
“The diamonds included a 20 carat white diamond, a 17 carat white diamond, and a three carat orange diamond which confirms the presence of valuable coloured diamonds in the orebody. A 35 carat diamond was recovered in January 2015, the largest diamond recovered at Ghaghoo to date.
“An initial sale of 10,000 carats will be held in Gaborone and Antwerp during January and February 2015,” said the London Stock Exchange listed company.
Gem Diamonds becomes the fourth company to hold diamond sales in Gaborone as the city gradually gains weight as a competitive global rough diamond-trading centre. Along with De Beers shifting its sight sales from London, the Okavango Diamond Company (ODC) completed its first full year of operating last year selling over three million carats in 2014.
De Beers has a fixed group of about 90 sightholders coming to Gaborone for 10 sights each year while Okavango has some 250 accredited buyers, accommodating 120 buyers in any particular sales period. Karowe Mine also holds seven auctions in Gaborone every year adding to the consistent buzz of diamond activity in Gaborone.
According to Gem CEO Clifford Elphick, as at the end of the December 2014, 48,023 tonnes of ore had been treated, with 10,167 carats having been recovered.
“The recovered grade during the commissioning period has averaged just over 21carats per hundred tones (cpht) compared to an expectation of 27cpht.
“Grade was negatively impacted by highly diluted ore derived from the margins of
“As the operation is in its commissioning phase, with planned ramp-up scheduled for the first part of the year, guidance with respect to operating costs, production and development will be provided after the achievement of steady state production at the end of the second quarter 2015,” he said.
Despite the positive outlook for Ghaghoo Mine, Elphick cautioned that the weakening of diamond prices experienced in the fourth quarter of last year, could spoil over into the first three months of 2015.
Elphick said that the announcement of the closure of the Antwerp Diamond Bank (ADB) in October 2014 has led to concerns over the availability of liquidity in the rough diamond market.
“Although the market has for a while been aware of the continuing issue of constrained liquidity, the official announcement of ADB’s closure weakened market sentiment during the Period.
“The overall sentiment in both the rough and polished diamond market leading up to and following the Hong Kong Jewellery Show in September 2014 was cautious, resulting in downward pressure on the price of rough diamonds during the Period.
“It is, however, expected that this cautious approach in the market will continue into the first quarter of 2015,” he said.
Gem, which also owns a mine in Lesotho, ended the year with US$ 110.7 million (1.05 billion) cash as at 31 December 2014.
The group has drawn down US$ 37.1 million of its total available facilities of US$ 78.7 million, resulting in a net cash position of US$ 73.6 million at year-end.
Elphick added that based on the positive results achieved in 2014, Gem Diamonds remains on track to declare a maiden dividend to shareholders following the 2014 full year results announcement in March 2015.