Sluggish market dents sales of Ghaghoo diamonds
Staff Writer | Friday July 31, 2015 14:28
According to a statement released by Gem Diamonds yesterday, high inventory levels and continued liquidity concerns, coupled with global macroeconomic uncertainties, have continued to place pressure on rough and polished diamond prices, denting the realised price of commercial stones recovered at Ghaghoo mine.
Recovered grades from the mine in the six months ended June 30 fluctuated between 28 carats per hundred tonnes (cpht) and 30 cpht in May and June, while a second parcel of 29,891 carat of commissioning-phase production sold for $4.9-million, or $165/carat, in July in a ‘difficult market’.
While this was below the average price of $210/carat achieved for the sale of the first parcel during the period, Gem Diamonds noted that production was not comparable from a quality perspective and this, together with a declining market for these goods, had a negative effect on the price achieved.
“The development of the Ghaghoo mine is progressing slower than planned due to difficult ground conditions which have hampered slot development in the first five production tunnels and constrained production ramp-up. A specialist (expertise) has been employed to ensure there is no further major ingress of water as the access decline and rim tunnel on Level 1 both begin advancing through the water fissure area in order to gain access to the second production section. A second parcel of Ghaghoo commissioning goods was sold in July for $4.9 million ($ 165 per carat) in a difficult market.
Encouragingly, a number of larger diamonds and small coloured diamonds have also been recovered during the period,” Gem CEO, Clifford Elphick said. Gem Diamonds ended the half-year with $83.8 million cash on hand, available drawn down facilities of $34.2-million of its available facilities and a net cash position of $49.6-million.