GEM Diamonds takes cash up $33.1m in fourth quarter as prices exceed pre-Covid levels

Clifford Elphick, CEO, GEM Diamonds

GEM Diamonds reported a major jump in net cash in the final quarter of its 2020 financial year ended-December and said there had been an improvement in diamond market conditions during the period.

GEM Diamonds operates the Letšeng mine in Lesotho. The company elected to keep Letšeng open during the country’s two-week Covid-19-related lockdown in January this year, having locked down operations during the first wave of the pandemic in 2020.

Net cash increased to $34.2m as of December 31, an increase of $33.1m in the quarter, the company said in a fourth quarter trading update.

The average price achieved for the financial year was $1,907 per carat from the sale of 99,172 carats which compares to an average last year of $1,637/carat. Ten diamonds were sold for more than $1m each, generating revenue of $22.6m. 

Including carats produced from the Letšeng Plants, the Alluvial Ventures (AV) plant, and the recovery tailings treatment facility, production for 2020 totalled 100,780 carats – about 12% less than in the previous financial year. Total carats sold was 111,291 which were 11% higher than in 2019.

Diamond prices were higher than those realised on a like-for-like basis before the onset of the Covid-19 pandemic, said GEM. “This, together with the continued pro-active cost control and cash preservation measures implemented across the group, has resulted in an increased positive cash flow for the group during a most difficult time for the diamond industry,” said Clifford Elphick, CEO of GEM Diamonds.