TIDMGEMD
RNS Number : 4722O
Gem Diamonds Limited
01 February 2023
1 February 2023
GEM DIAMONDS LIMITED
Q4 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
October 2022 to 31 December 2022 ("Q4 2022" or the "Period").
Highlights:
-- All operational metrics achieved for FY 2022 were within or better than guidance.
-- 26 530 carats were recovered during the Period, resulting in
106 704 carats recovered for the year (FY 2021: 115 335
carats).
-- 107 498 carats were sold in 2022, achieving an average price
of US$1 755 per carat (FY 2021: 109 697 carats sold for US$1 835
per carat).
-- The highest price achieved in the Period was US$34 170 per
carat for a 42.98 carat white diamond for a total price of US$1 469
000.
-- Four diamonds sold for more than US$1.0 million each,
generating revenue of US$5.3 million during the Period.
Corporate and Financial:
-- The Group ended the Period with US$8.7 million cash on hand
and utilised project facilities of US$5.5 million (under the
project debt facility for the replacement of the Primary Crushing
Area (PCA)), resulting in a net cash position of US$3.2 million at
Period end (Q3 2022: US$5.4 million).
-- The Group had undrawn and available facilities of US$82.6
million at Period end including the remaining US$2,6 million
project debt facility for the replacement of the PCA.
Gem Diamonds' CEO, Clifford Elphick, commented:
"Despite Letšeng continuing to be impacted by Eskom-driven power
outages which not only interrupt the production cycle but also
impact costs significantly due to the increased alternative power
generation costs, it was pleasing to meet planned operational
metrics in 2022. Long-term alternative power supply options are
being actively investigated.
Pleasingly, the implementation of initiatives aimed at energy
efficiency and carbon reduction resulted in a year-on-year
reduction in the Group's carbon footprint of 10% ".
1. Diamond Market
Letšeng's tenders were well-attended which contributed
positively to the prices achieved for Letšeng's large high-value
diamonds during the Period.
2. Letšeng
2.1. Rough Diamond Sales
H1 2022 Q3 2022 Q4 2022 FY 2022 FY 2021 FY 2022 vs FY 2021 % Change
Carats sold 57 076 27 913 22 509 107 498 109 697 -2%
-------- -------- -------- -------- -------- ----------------------------
Total value (US$ millions) 99.6 56.6 32.4 188.6 201.3 -6%
-------- -------- -------- -------- -------- ----------------------------
US$/carat 1 745 2 028 1 438 1 755 1 835 -4%
-------- -------- -------- -------- -------- ----------------------------
2.2. Production
H1 2022 Q3 2022 Q4 2022 FY 2022 FY 2021 FY 2022 vs FY 2021 %
Change
Waste tonnes stripped 6 289 380 2 116 761 1 747 704 10 153 845 18 663 492 -46%
---------- ---------- ---------- ----------- ----------- ---------------------------
Ore tonnes treated 3 017 664 1 246 209 1 242 703 5 506 576 6 172 429 -11%
---------- ---------- ---------- ----------- ----------- ---------------------------
Satellite pipe
contribution (tonnes) 1 378 404 713 239 946 323 3 037 966 3 326 458 -9%
---------- ---------- ---------- ----------- ----------- ---------------------------
Carats recovered (1) 55 156 25 018 26 530 106 704 115 335 -7%
---------- ---------- ---------- ----------- ----------- ---------------------------
Grade recovered (cpht) (1) 1.83 2.01 2.13 1.94 1.87 4%
---------- ---------- ---------- ----------- ----------- ---------------------------
(1) Includes carats produced from the Letšeng Plants, the
recovery tailings treatment facility and the Alluvial Ventures (AV)
plant (Until 30 June 2022)
The 46% reduction in waste tonnes mined in 2022 compared to 2021
was in line with the mine plan. The reduced waste profile from
slope steepening of the active cutbacks in Main pipe contributed to
this reduction. The Satellite pipe contribution of 3.0 million
tonnes treated in 2022 was in line with the planned annual
Satellite ore contribution.
Letšeng's Plants treated a total of 1.2 million tonnes of ore
during the Period. The 11% reduction in total ore tonnes treated in
2022 compared to 2021 was mainly driven by the expiry of Alluvial
Ventures' processing contract on 30 June 2022 as planned to allow
for the waste stripping of the new cutback in the Main pipe to
commence.
The reduction in ore tonnes treated for the Period was, as
previously reported, due to the Lesotho general election requiring
a compulsory two-day site wide shutdown at Letšeng to allow the
workforce to vote in their respective constituencies, a secondary
crusher breakdown in Plant 2 and continued power disruption on the
energy supply network. The reduction in ore tonnes treated for 2022
consequently impacted the carats recovered for the year
negatively.
Frequency of recovery of large diamonds
2022 2021 FY Average
2008 - 2021
Number of diamonds
---- ---- ------------
>100 carats 4 6 8
---- ---- ------------
60-100 carats 18 16 19
---- ---- ------------
30-60 carats 69 81 77
---- ---- ------------
20-30 carats 108 122 114
---- ---- ------------
Total diamonds > 20 carats 199 225 218
---- ---- ------------
The recovery of four >100 carat diamonds during the year
which was lower than the 14-year average of eight, impacted overall
revenue generated during the year. Demand for Letšeng's high
quality goods however remained high and the prices achieved for
these high quality >100 carat diamonds remained strong.
2.3. FY 2022 Guidance
2.3.1. Production
Mine Plan FY 2022 Guidance issued
Waste tonnes mined (Mt) 10.2 10 - 12
------- ---------------
Ore treated (Mt) 5.5 5.45
------- ---------------
Satellite pipe ore contribution (Mt) 3.0 2.8 - 3.0
------- ---------------
Carats recovered (Kct) 106 104
------- ---------------
Carats sold (Kct) 107 105
------- ---------------
2.3.2. Cost
Letšeng maintained its direct cash and operating costs per tonne
treated within expected targets and capex under the full year 2022
guidance. All costs were however impacted by the increased diesel
usage due to the Eskom-driven power outages and increased costs of
diesel and other consumables. Waste cash costs per waste tonne were
slightly above guidance further impacted by the lower waste tonnes
(on the lower end of guidance) during the year.
Costs FY 2022 Guidance issued
Direct cash costs (before waste) per
tonne treated (Maloti) 264 250 - 270
------- ---------------
Operating costs per tonne treated(1)
(Maloti) 340 330 - 350
------- ---------------
Mining waste cash costs per tonne of
waste mined (Maloti) 67 62 - 65
------- ---------------
Total capex(2) (US$ million) 11.5 19 - 23
------- ---------------
(1) Operating costs per tonne excludes royalty, selling costs,
depreciation and mine amortisation, but includes inventory, waste
and ore stockpile adjustments.
(2) The 2022 guidance for capital included the full costs of the
PCA capital. This was not fully incurred in 2022 and will be
carried over to 2023.
3. Sustainability
Energy efficiency and carbon reduction initiatives contributed
to a year-on-year reduction in the Group's carbon footprint of
10%
During the Period, one LTI occurred at Letšeng , and the
Group-wide All Injury Frequency Rate was 0.72 for 2022. 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
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
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END
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