DiamonEx in disappointing sale of Lerala diamonds

WANETSHA MOSINYI
Staff Writer | Tuesday November 4, 2008 00:00

 

The BSE-listed company achieved an average price of US$20 per carat for the whole run of the mine parcel, the company says in its quarterly report released on October 31.

This is much less than the preliminary valuation of the parcel and DiamonEx attributes this to the current difficult market conditions.

WWW International Diamond Consultants, the company's sales agent and advisor, reported that the value achieved for the first tender of Lerala production was 'deeply disappointing' but not surprising in the context of the current market crunch.

Trading in rough diamonds has effectively grounded to a halt as general economic uncertainties, particularly liquidity shortages, take effect.

However, once the extraordinary and unforeseen economic turmoil has worked its way through the system, WWW is confident that long-term prognoses for the diamond industry remain favourable.

DiamonEx says it is currently undertaking a detailed assessment of short, medium and long-term forecasts of diamond prices and assessing the potential impact of the market price volatility on the profitability and the continuing operations of the Lerala Diamond Mine.

The report says historical prices of Lerala diamonds, together with data compiled during the feasibility study, indicate that current prices are not representative of longer-term diamond price expectations.

'The results of this assessment will be advised to the market in due course.'

The company says it will proceed with the next diamond sale, which is scheduled for mid-November.

The first diamonds sale of Lerala were presented for viewing in Gaborone two weeks ago, followed by viewing in Antwerp later.

The Australia-based company completed the last phase of commissioning of the mine at the end of August, leading to the commencement of diamond recovery.

Lerala is expected to produce 330,000 carats of diamonds per year through a 10-year life.