Miner rocks diamond market with large finds
Gem Diamonds has discovered two diamonds bigger than 100 carats at its Lesotho mine in southern Africa, bringing the struggling miner a step closer to ending a drought of large stones.
Gem unearthed a 104.73 carat D colour Type IIa diamond and a 151.52 carat Type I yellow diamond at its Letseng mine, the company said in a statement yesterday. Type IIa diamonds contain very little or no nitrogen atoms and are the most expensive stones.
Until now Gem had reported just one large discovery this year, after unearthing a 114-carat diamond in April. Letseng is renowned for the size and quality of its stones, with an average sales price of almost $2,000 a carat, the highest in the industry. Yet the company has suffered recently from a lack of big finds and discovered just five stones bigger than 100 carats last year, fewer than half as many as it found in 2015.
Gem gained 2.2pc to 93.5 pence a share at 10:17am on Monday, paring this year's decline to 15pc.
Gem, which fell to a record low in April, has also been hurt by weakening prices for lower-quality stones produced at its Ghaghoo mine in Botswana. In February, the company said it was shutting the newly-built operation because prices had fallen by a third since 2015.
While the latest finds will offer some reassurance to investors, they're not even close to the biggest found at Letseng. In 2015, Gem sold a 357-carat stone for $19.3m and in 2006 found the 603-carat Lesotho Promise.
Last week, 27pc of shareholders voted against the re-election of chief executive officer Clifford Elphick.