Gem Diamonds’ revenue and profit rose for the full year as a higher proportion of large diamonds led to an increase in the average price.
Revenue from the company’s Letšeng deposit in Lesotho grew 10% to $154.2 million for the 12 months, it said Thursday. During the year, the miner sold 13 diamonds greater than 100 carats, compared with only five the previous year.
Sales volume rose 5% to 109,967 carats, while the average price increased 4% to $1,390 per carat. Gem Diamonds derived $152.8 million of total revenue from rough-diamond sales, while it made $1.4 million through offtake agreements with diamond manufacturers, whereby the company earns a portion of the polished proceeds.
During the year, the miner sold 23 diamonds for over $1 million each, generating revenue of $63.7 million. A white rough diamond yielded $41,007 per carat in 2024, achieving the highest per-carat price for the year.
Profit for the period surged $8.1 million, more than five times the $1.6 million it reported in 2023. Output slipped 4% to 105,012 carats as the company mined ore from a lower-grade portion of the site. Gem Diamonds reduced its net debt to $7.3 million as of December 31, compared with $21.3 million at the end of 2023.
The company has seen “modest improvements” in prices of both rough and polished diamonds since the start of the year and is “optimistic” these will continue throughout the year. However, the next four years will bring challenges to the business as it begins to implement its new mine plan. While that project aims to reduce waste volumes significantly, it will also cut off access to the deposit’s higher-grade, higher-value ore.
“The diamond market is expected to remain under pressure, with signs of a modest recovery in diamond prices seen in early 2025,” the company said. “The implementation of Letšeng’s updated mine plan will present material challenges for the business, with no availability of satellite pipe ore until the end of 2029 while the steeper slopes are implemented. During this period, our focus will remain on factors within our control, including cost containment, sound capital allocation decisions, and maintaining operational efficiencies while responsibly managing our cash resources.”
Image: The Letšeng mine. (Gem Diamonds)
