Market NewsCommentGem optimistic as Letseng sales sparkle

Gem optimistic as Letseng sales sparkle

Gem Diamonds provided a trading update for the 12 months ended December 2007, saying operations have generally performed ahead of expectations and that the company is in a good position. Gem reported an 81% jump in sales from Letseng to $152 million during the full year of 2007, from $83.9 million a year ago. The LSE-listed company expects to double production at Letseng with the construction of a second plant, which is expected to go into production in the second quarter of 2008. Gem holds 70% of Letseng, the remaining 30% is held in partnership with the Government of the Kingdom of Lesotho. In November, last year, Gem acquired a controlling interest in Kimberley Diamond company in Australia. The most recent sale took place by tender in Antwerp at the end of January 2008 and achieved an average price of US$220 per carat, an increase of 22% on the last tender prior to acquisition. In DRC, where the company has interests in three projects - Mbelenge, Lubembe and Longatshimo, Gem said the grades realised at Mbelenge were disappointing, and the original expectations of the units at the Lubembe project were not expected to be met. Gem also announced that Capital Group International Inc has cut its holding in the company to 6.82% or about 4.3 million shares from 7.14% or 4.5 million shares.

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