Gem Diamonds Revenues Leap 138%, Polishing to Begin Early 2009

Gem Diamonds saw its half-year revenues increase 138 percent to $166.8 million on rising diamond prices across all top quality goods. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) rose 68 percent to $56.5 million. Production in the first half of the year totaled 283,000 carats.

At the Letšeng mine in Lesotho, the construction of a second processing plant was completed in March, increasing production from the mine. A record average price per carat was achieved for diamonds from Letšeng of $2,512 per carat, a 27 percent increase over 2007, Gem Diamonds said in a release.

The projected mine life of the Ellendale mine in Western Australia, a source of fancy yellow diamonds, has been shortened to eight years. The average price per carat of rough from the mine increased 66 percent to $207 p/c, while polished diamonds, sold in “diamond beneficiation trials,” achieved average prices of $28,860 per carat.

Production sold from the Cempaka mine in Indonesia totalled 22,000 carats sold for an average of $305 p/c, a 40 percent increase.

Moving downstream, Gem Diamonds has continued with its “diamond beneficiation trials,” with the sale of 93 carats of white and 16 carats of yellow polished diamonds, all sold on tender in Antwerp.

A diamond cutting and polishing facility is being established in Dubai, with technology acquired from Antwerp-based diamond technology developer Matrix Diamond Technology, which has cut and polished the diamonds tendered so far. The facility is expected be in operation by early 2009.

The extra margin achieved by polishing the rough diamonds, Gem Diamonds notes, has thus far averaged 30 percent, but a margin uplift of 100 percent was achieved for some diamonds in the trials.