REG - Gem Diamonds Limited - Q4 2023 Trading Update

Gem DiamondsAnnouncement

01/02/2024 07:00

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RNS Number : 5836B  Gem Diamonds Limited  01 February 2024

1 February 2024
 
 

 

GEM DIAMONDS LIMITED

Q4 2023 Trading Update

 

Gem Diamonds Limited (LSE: GEMD) ("Gem Diamonds" or the "Company" or the
"Group") provides the following Trading Update detailing the Group's
operational and sales performance from 1 October 2023 to 31 December 2023 ("Q4
2023" or the "Period").

 

Highlights:

·    All operational and financial metrics achieved for FY 2023 were
within or better than revised guidance.

 * 32 142 carats were recovered during the Period (+16% from Q3 2023), resulting
in 109 656 carats recovered for the year (FY 2022: 106 704 carats).

·   104 520 carats were sold in FY 2023, achieving an average price of
US$1 334 per carat (FY 2022: 107 498 carats sold for US$1 755 per carat).

·    The highest price achieved in the Period was US$33 745 per carat for
a 117.09 carat white diamond which sold for US$4.0 million.

·   Six diamonds sold for more than US$1.0 million each, generating
revenue of US$13.8 million during the Period.

·    Post Period end, a large high-quality 295 carat white diamond was
recovered and is scheduled to be sold in Q1 2024.

·   Letšeng successfully concluded the insourcing of its drill, load and
haul activities with no interruption to production.

·    No LTI's were reported during the Period. The Group's AIFR for FY
2023 was at an all-time low of 0.67.

Corporate and Financial:

 

·    The Group ended the Period with US$16.5 million cash on hand and
utilised facilities of US$37.8 million, resulting in a net debt position of
US$21.3 million at Period end. The net debt position includes a part payment
of US$13.4 million relating to the purchase of the mining equipment pursuant
to the insourcing transaction. The balance of US$9.2 million was paid in
January 2024.

·    The Group had undrawn and available facilities of US$45.9 million at
Period end.

1.    Diamond Market

 

The global rough diamond market continued to experience downward pressure in
Q4 2023. This negatively impacted the average dollar per carat and revenue
achieved during the Period.

2.    Letšeng Diamonds production summary

                                    H1          Q3          Q4           Q3 - Q4    FY          FY

                                    2023        2023        2023         % Change   2023        2022
 Waste tonnes stripped              4 846 680   2 422 117   1 572 830    -54%       8 841 627   10 153 845
 Ore tonnes treated                 2 467 250   1 233 987   1 323 428    7%         5 024 665   5 506 576
 Satellite pipe ore tonnes treated  1 269 987   850 013     849 031      0%         2 969 031   3 037 966
 Carats recovered                   50 601      26 913      32 142       16%        109 656     106 704
 Grade (cpht)                       2.05        2.18        2.43         10%        2.18        1.94
 Carats sold                        52 163      23 955      28 402       16%        104 520     107 498
 Total value (US$ millions)         71.6        31.4        36.4         14%        139.4       188.6
 Achieved US$/carat                 1 373       1 310       1 281        -2%        1 334       1 755

 

Overall tonnes treated by the Letšeng plants in FY 2023 were comparable to
2022. The reduction from 5.5 million tonnes to 5.0 million tonnes was
primarily due to the expiry of Alluvial Ventures' processing contract on 30
June 2022, which contributed 0.4 million tonnes in that year. Initiatives to
stabilise plant performance during Q3 2023 by reducing throughput rates in the
processing plants resulted in improved plant availability leading to an
increase in tonnes treated and carats recovered from Q3 2023 to Q4 2023.

Taking into account the reduced tonnes treated for FY 2023, total waste tonnes
mined were consequently reduced, which also had a positive impact on costs.
This reduction in waste tonnes remains in line with the optimised mine plan
and ensures future availability of ore. The slope steepening of the active
cutbacks in the Main pipe also contributed to this reduction.

 

3.    Frequency of recovery of large diamonds

The table below represent the number of diamonds recovered in each size
category greater than 20 carats.

 Size category                  2023  2022  Average

                                            2008 - 2022
 >100 carats                    5     4     8
 60-100 carats                  13    18    18
 30-60 carats                   71    69    76
 20-30 carats                   107   108   114
 Total diamonds > 20 carats     196   199   216

 

The number of large diamonds recovered at Letšeng were similar to that in the
prior year, however the decrease in prices achieved in 2023 negatively
impacted overall revenue achieved during the year.

 

4.    FY 2023 performance to revised guidance

                                                                FY 2023  Revised

                                                                         guidance
 Waste tonnes mined (Mt)                                        8.8      9 - 11
 Ore treated (Mt)                                               5.0      4.9 - 5.1
 Satellite pipe ore treated (Mt)                                3.0      2.8 - 3.0
 Carats recovered (Kct)                                         109      104 - 107
 Carats sold (Kct)                                              104      102 - 105
 Direct cash costs (before waste) per tonne treated (Maloti)    288      285 - 305
 Operating costs per tonne treated(1) (Maloti)                  374      380 - 395
 Mining waste cash costs per tonne of waste mined (Maloti)      66       65 - 70
 Total capex(2) (US$ million)                                   9        13 - 15

(1) Operating costs per tonne excludes royalty, selling costs, depreciation
and mine amortisation, but includes inventory, waste and ore stockpile
adjustments.

(2)Capex excludes US$22.6 million relating to the purchase of the mining fleet
at Letšeng.

 

FOR FURTHER INFORMATION:

Gem Diamonds Limited

Kiki Constantopoulos, Company Secretary

ir@gemdiamonds.com (mailto:ir@gemdiamonds.com)

 

Celicourt Communications

Mark Antelme / Felicity
Winkles

Tel: +44 (0) 20 770 6424

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014.

The Gem Diamonds Limited LEI number is 213800RC2PGGMZQG8L67.

ABOUT GEM DIAMONDS:

Gem Diamonds is a leading global producer of high value diamonds. The Company
owns 70% of the

Letšeng mine in Lesotho. The Letšeng mine is famous for the production of
large, exceptional white

diamonds, making it the highest dollar per carat kimberlite diamond mine in
the world.

www.gemdiamonds.com (http://www.gemdiamonds.com)

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