Gem Diamonds says prices firmed in Q1

[] — Gem Diamonds said diamond prices rose in the first quarter on continued strong demand and it expects to achieve its 2010 production targets, sending its shares up 5.4 percent.

“The better-than-expected Christmas sales in the U.S., restocking in the cutting centers and continued strong demand for diamond jewellery in India and China have resulted in strong rough and polished diamond prices,” the company said.

Price of rough diamonds rose sharply in comparison to polished diamonds, it said.

Gem Diamonds, which holds a 70 percent stake in Letseng Diamonds in partnership with the government of the Kingdom of Lesotho, said mining costs at Letseng continued to be hurt by the weakening of the U.S. dollar against the South African rand.

Shares of Gem Diamonds were up 5.4 percent at 266 pence at 0739 GMT on Monday on the London Stock Exchange.