REG - Gem Diamonds Limited - Q3 2022 Trading Update

Gem DiamondsAnnouncement

02/11/2022 07:00

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RNS Number : 9656E  Gem Diamonds Limited  02 November 2022

2 November 2022
 
 

 

GEM DIAMONDS LIMITED

Q3 2022 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 July 2022 to 30 September 2022 ("Q3
2022" or the "Period").

 

Highlights:

·    Revenue generated in the Period amounted to US$56.6 million,
achieving an average price of US$2 028 per carat (Q3 2021: US$1 589 per
carat).

·     25 018 carats were recovered during the Period, resulting in 80 174
carats recovered for the year to date (YTD 2021: 82 266 carats).

·    84 989 carats have been sold for the year to date, achieving an
average price of US$1 838 per carat (YTD 2021: US$1 782 per carat).

·    The highest price achieved in the Period was US$79 543 per carat for
a 10.07 carat pink diamond.

·    10 diamonds sold for more than US$1.0 million each, generating
revenue of US$25.1 million during the Period.

·    Four diamonds greater than 100 carats were sold during the Period
generating revenue of US$15.6 million. Three of these diamonds were recovered
in Q2 2022.

Corporate and Financial:

 

·    The Group ended the Period with US$17.4 million cash on hand
(excluding US$15.2 million of September tender proceeds that were received
after Period end).

·    Drawn down facilities amounted to US$12.0 million resulting in a net
cash position of US$5.4 million at Period end (excluding US$15.2 million of
September tender proceeds that were received after Period end) (H1 2022:
US$12.1 million).

·    The Group had undrawn and available facilities of US$65.3 million at
Period end.

·    The 5.5 year term loan facility for the construction of the mining
complex at Letšeng, was fully repaid at the end of the Period.

 

Gem Diamonds' CEO, Clifford Elphick, commented:

 

"It is pleasing to see that the average price achieved for the Letšeng
tenders for Q3 2022 exceeded US$2 000 per carat, notwithstanding the current
downturn in the global economy.

Post Period end, production at Letšeng was impacted by the Lesotho general
election on 7 October and the compulsory two-day shutdown of operations
legislated by the Government of the Kingdom of Lesotho to allow voting in
employee home wards. In addition, a crusher breakdown was experienced in Plant
2, which has since been repaired and the plant is running at normal capacity."

 

1.    Diamond Market

 

The downturn in the global economy has impacted the diamond market. However,
the tenders in Antwerp, together with a Dubai tender viewing in September
2022, were well-attended and contributed positively to the prices achieved
during the Period.

 

2.    Letšeng

 

2.1.  Rough Diamond Sales

 

                             H1 2022  Q3 2022  YTD 2022  YTD 2021  YTD 2022 vs YTD 2021 % Change
 Carats sold                 57 076   27 913   84 989    84 906    0%
 Total value (US$ millions)  99.6     56.6     156.2     151.2     3%
 US$/carat                   1 745    2 028    1 838     1 782     3%

 

2.2.  Production

 

                                       H1 2022     Q3 2022     YTD 2022    YTD 2021     YTD 2022 vs YTD 2021 % Change
 Waste tonnes stripped                 6 289 380   2 116 761   8 406 141   14 167 058   -41%
 Ore tonnes treated                    3 017 644   1 246 209   4 263 873   4 642 844    -8%
 Satellite pipe contribution (tonnes)  1 378 404   713 239     2 091 643   2 313 562    -10%
 Carats recovered(1)                   55 156      25 018      80 174      82 266       -3%
 Grade recovered (cpht)(1)             1.83        2.01        1.88        1.77         6%

(1) Includes carats produced from the Letšeng Plants, the recovery tailings
treatment facility and the Alluvial Ventures (AV) plant (Until 30 June 2022)

 

The 41% reduction in waste tonnes mined and the 10% reduction in Satellite
pipe contribution to tonnes treated YTD 2022 is in line with the mine plan.

 

Letšeng's Plants treated a total of 1.2 million tonnes of ore during the
Period and in line with the mine plan, 57% was sourced from the Satellite
pipe, and 43% from the Main pipe.

 

2.3.  Production Guidance

 

Post Period end, the Lesotho general election required a compulsory two-day
site wide shutdown at Letšeng to allow the workforce to vote in their
respective constituencies, resulting in loss of production. In addition, post
Period end, a secondary crusher breakdown in Plant 2 and continued power
disruption on the energy supply network resulted in a loss of production.
Repairs to the secondary crusher have been completed and the plant is running
at normal capacity.

 

As previously reported in the H1 2022 Trading Update, the 2022 production
metrics were guided to the lower end of the original guidance as published in
March 2022. The impact of the loss of production in October has resulted in a
revision of the full year guidance for tonnes treated to approximately
5.45 million tonnes (previously between 5.60 and 5.80 million tonnes). As a
result of the reduction in tonnes treated, guidance with respect to carats
recovered and carats sold has been reduced to approximately 104k (previously
112k to 116k) and approximately 105k (previously 110k to 114k) respectively.
Cost guidance remains unchanged.

 

3.    Sustainability

 

Gem Diamonds' Sustainability and Climate Change Reports were nominated as
finalists by the influential investor media platform ESG Investing in two
reporting categories and was announced the winner of the 'Best Climate-Related
Reporting (Small Cap)' award at the ESG Investing Awards 2022. The award has
been given to Gem Diamonds for its 2021 "Our Approach to Climate Change"
report which focused on how climate change considerations are being
incorporated into financial planning and strategy at Gem Diamonds.

 

During the Period, no LTI's occurred at Letšeng, and the Group-wide All
Injury Frequency Rate was 0.67.

No major or significant community or environmental incidents occurred across
the Group during the Period.

 

FOR FURTHER INFORMATION:

 

Gem Diamonds Limited

Susan Wallace, Company Secretarial department

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

 

Celicourt Communications

Mark Antelme / Felicity
Winkles

Tel: +44 (0) 208 434 2643

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 diamond producer of large high value
diamonds. The Company owns 70% of the Letšeng mine in Lesotho and is
currently in the process of selling its 100% share of the Ghaghoo mine in
Botswana. 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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