GEM Diamonds reported a 7% decline in first quarter revenue year-on-year which came in at $43.9m owing to a decline in carats sold during the three month period.
Diamond prices, however, remained robust for the company which operates the high-value Letšeng mine in Lesotho. Production was 29,010 carats in the first quarter compared to 26,110 carats in the first quarter of last year.
Carats sold during the period totalled 26,916 compared to some 29,298 carats sold in the first quarter of 2020.
The company achieved an average price of $1,630 per carat compared to $1,615/carat in the first quarter of the previous financial year – a performance that Clifford Elphick, CEO of GEM, said was “pleasing”.
He added, however, that the mining mix was “not as impressive as last year. It is anticipated that the mining mix should improve over the coming months as the richer parts of the satellite pit are accessed in accordance with the mine plan”.
GEM ended the three month period with $11.7m in net cash after paying a $10m dividend announced in 2020, and settling tax obligations with Lesotho. This compares to net cash of $34.6m as of December 31.
GEM Diamonds has forecast production of 123,000 to 127,000 carats in the current financial year and sales of 119,000 to 123,000 carats.
Commenting on the diamond market in March, Elphick said there had been a significant improvement, especially in the mid-stream – diamond cutters and polishers – where confidence had improved largely owing to a cut in supplies last year.
He added that GEM was increasingly looking into supplying high value rough stones directly to jewellery brands, with one company recently discussing continuous supply.
The potential move into direct end-user supply had been investigated previously by the firm as it sought to establish better pricing of its rough stones to the mid-stream.