Gem Diamonds bullish on securing Gope licence

STAFF WRITER | Friday October 29, 2010 00:00

'Negotiations for the licence are ongoing and should be completed by the end of the year,' Gem stated in a statement accompanying its third quarter update. Gope has a resource of 20,5-milliion carats with an average one site value of $3,3-billion.

If a mining licence is granted, Gem will develop Gope into a mine producing over one-million carats a year.LSE-listed Gem Diamonds CEO Clifford Elphick yesterday said that the company would continue to drive the growth plans at its Leteng and Ellendale mines, despite the impact that the continued strength of the Lesotho loti and the Australian dollar were having on operating costs.

The diamond miner's sales revenues for the third quarter of this year remained relatively flat at $51,9-million, compared with the revenues of $51,5-million earned in the third quarter of 2009.

Gem sold 22 503 ct of diamonds from the Leteng mine, in Lesotho, during the quarter, 21 percent higher than the 18 642 ct sold during the same quarter in 2009.

The diamonds sold at an average price of $1 680/ct, yielding revenues of $37,8-million for the third quarter of this year, up 18 percent on the $31,9-million earned the year before, when diamonds sold at an average price of $1 710/ct.

Output at Leteng rose by 2 percent to 24 119 ct in the quarter, compared with the 23 756 ct produced the year before.

Meanwhile, Gem sold 45 percent less carats from its Ellendale mine, in Australia, during the third quarter of the year.

The 21 436 ct sold during the quarter earned the company revenues of $14,1-million, down 28 percent on the $19,6-million in revenues earned in the third quarter of last year from the sale of 38 686 ct.Average selling prices had increased by 30 percent year-on-year to $656,6/ct in the quarter, compared with $505,4/ct the year before.