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(Sharecast News) - Analysts at Berenberg slashed their target price for shares of Gem Diamonds on the back of the miner's second quarter trading statement.
The outfit's second quarter production, sales volumes and realised prices were all slightly lower than Berenberg had anticipated.
Gem Diamonds also raised its full-year cost guidance, especially due to the increased costs for fuel and explosives.
It also guided towards full-year production at the lower end of its guidance range due to excessive rain, disruptions to its energy supply network and the negative impacts on its supply chains.
"The company's Letšeng diamond mine is a low-grade open-pit operation and thus movements in the cost structure have material impacts on our estimates, with c90% inflation in diesel prices a particular headwind," they observed.
Hence, after updating their model to reflect the results and new guidance, their target was cut from 80.0p to 60.0p, although their recommendation remained at buy.
