Gem Diamonds Di Share News (GEMD)

LONDON (Alliance News) - Gem Diamonds Ltd Thursday said production and sales decreased during the third quarter compared with the previous quarter, and it plans to sell the first recovered carats from its Ghaghoo mine early next year.

During the third quarter ended September 30, the company sold 23,550 carats, a 32% reduction from the second quarter when it sold 34,510 carats. In the third quarter of 2013, the company sold 20,405 carats.

The company achieved an average price of USD2,603 per carat during the quarter, generating USD61.3 million in sales. In the previous quarter it achieved an average price of USD2,582 per carat generating USD89.1 million. In the comparable period a year earlier, it achieved an average price of USD2,022 per carat and generated USD41.3 million in sales.

Included in the sales is one exceptional 197.6 carat diamond that was recovered in July and sold during the third quarter for USD10.6 million, and eight other rough diamonds that achieved prices of over USD1 million each.

"The market for both rough and polished diamonds has declined towards October, however, we remain optimistic that prices for Let?eng's high value production will be resilient for the remaining sales of 2014," said the company in a statement.

The Let?eng mine is in Lesotho and is the company's sole producing asset until it completes its development of the Ghaghoo mine in Botswana.

The company recovered less carats from the Let?eng mine in the third quarter, slightly offset by an increase in grade. The company recovered 28,365 carats at an average grade of 1.77 carats per hundred tonnes of ore. In the second quarter, the company recovered 28,625 carats with a lower grade of 1.74 carats per hundred tonnes of ore. The reduction in carats recovered was due to replacing a conveyor at one of its plants, it said.

In the third quarter of 2013, the company recovered 25,559 carats at an average grade of 1.62 carats per hundred tonnes of ore.

At the Let?eng mine, the company is on track to have the new coarse recovery plant project completed in the second quarter of 2015. The project is aimed at increasing the treatment capacity and reducing diamond damage, it said in a statement.

At the Ghaghoo mine in Botswana, developments of four production tunnels are being completed and have been linked to older tunnels at the mine and to date, 4,028 carats have been recovered from the mine. The company has decided to sell the carats alongside carats from the Let?eng mine in February 2015.

"The third quarter of 2014 saw continued strong operational performance at Let?eng as well as the opening of the Ghaghoo mine," said Chief Executive Clifford Elphick.

Gem Diamond shares were up 2.0% to 163.75 pence per share Thursday morning.

By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance

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