Gem Diamonds Share Discussion Threads

[haywards26] 13/3/2019 10:57

No reason for share price fall in my view, but Mr Market is always unpredictable...

[shiv1986] 13/3/2019 10:39

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[ukgeorge] 13/3/2019 10:38

From SPAngel

Gem Diamonds (GEMD LN) 89.2p, Mkt Cap £123.9m –Strong 2018 results

• Gem Diamonds reports an 185% increase in attributable profit, before exceptional items, for 2018 of US$26.0m (2017 – US$9.1m). EBITDA, also reported before exceptional items, grew by 69% to US$82.3m (2017 – US$48.6m).

• The company has, however, elected “not to propose the payment of a dividend in respect of the 2018 financial year and ongoing focus on the Business Transformation, in order to strengthen the balance sheet.”
• The results are underpinned by a 13% increase in diamond production to 126,875 carats, coupled with a 13% reduction in the volume of waste removal and a 10% improvement in the average revenue to US$2,131 per carat.

• During the year, the Letseng mine yielded a record fifteen diamonds in excess of 100 carats in size, including a “138.28 carat white diamond [which] achieved US$60,428 per carat, the highest dollar per carat achieved for a rough white diamond during the year” as well as the “910 carat Lesotho Legend” diamond which is described as “the fifth largest gem-quality diamond ever recovered” and which was “sold on tender in Antwerp for US$40 million in March 2018.”

• Including these particularly large stones, the mine also produced a record total of 257 diamonds greater than 20 carats in size (2017 – 213). The company confirms that “Prices achieved for Letšeng's large, high-value diamonds remained firm during the year. The recovery and timely sale of the 910 carat Lesotho Legend and the flexible marketing channels used in the sale of Letšeng's high-quality diamonds contributed to achieving an average price of US$2 131 per carat in 2018”.
• In a mine with the capacity to produce large, high value diamonds, ensuring the recovery, unbroken, of these larger diamonds the company is working on technological solutions to “identify locked diamonds within kimberlite” and “to liberate diamonds using a non-mechanical process. These technologies are aimed primarily at limiting diamond damage and reducing operating costs”.
• The company has approved the construction of a US$3m pilot plant at Letseng “which employs innovative technology to identify diamonds within kimberlite ore. This project will also include the use of a prototype high-voltage pulse generating unit to liberate the diamonds. We anticipate the pilot plant to be commissioned during Q2 2019.”

• Gem Diamonds reports a 31st December 2018 cash balance of US$50.8m (2017 – US$47.7m) and, we estimate, a net cash balance of US$16.6m (2017 – US$1.4m).

• After investing US$99.5m during the year (2017 – US$101.2m) the company generated free cash, before financing, of approximately US$38.9m during 2018 compared to the net outflow of US$3.8m during 2017.
• Commenting on what he described as a “good set of results”, Chief Executive, Clifford Elphick, confirmed that “The Business Transformation process has progressed well and remains on-track to achieve the target of US$100 million in cost savings and efficiencies by 2021. By December 2019, the initiatives already implemented are expected to deliver US$64 million to the end of 2021."

• Mr. Elphick also disclosed that “The mine plan for Letšeng was revised during 2018, with the aim of further reducing the waste stripping through the steepening of inter-ramp slope angles. Mining in accordance with this plan has commenced and is expected to significantly increase the net present value of the mine”.

Conclusion: Gem Diamonds reports a strong performance during 2018 and is continuing to invest in optimising the mine plan at Leseng as well as developing technology to minimise loss and breakage of its larger diamonds.

[davethehorse] 13/3/2019 10:19

Maybe some of the big holders will be accumulating more at this price, we will see.

[davethehorse] 13/3/2019 10:18

Yes baffling I expected the shares to at least hold the 100p sort of level but there are obviously holders looking to trade in and out and that's what we have seen recently, with no 2019 news to go on.

[haywards26] 13/3/2019 10:05

The share price move following good results is baffling to me...The only negative I detected was the continuing costs in relation to the mine they have ended production at and looking to sell.

The news on diamonds found in 2019 appears to be lacking too

But a strong 2018, cost savings program progression, increase use of technology to extract diamonds more efficiently. All good news I thought..

[ukgeorge] 13/3/2019 08:32

They don't give enough information. Firstly on the $100m cost saving program and secondly on the mine outlook. Is the mine plan moving away from the rich part of the ore body. Are they expecting less exceptionals? I am not holding. These are what people need to be asking on the conference call.

[davethehorse] 13/3/2019 08:06

Nothing in the results we didn't already know, good results but how has 2019 started?

[davethehorse] 12/3/2019 13:19

Still holding, let's see what tomorrow brings, will be interesting to find how how Q1 is going so far. Shares are weak but holding the support level so if tomorrow's news going forward is positive the shares should rise.

[ukgeorge] 12/3/2019 13:03

Should probably get back in here.....97p

[davethehorse] 08/3/2019 14:52

Wonder if there will be news on the proposed Ghaghoo mine sale on Weds too? Would be another welcome cash boost if a buyer has been found.

[davethehorse] 08/3/2019 13:50

Not sure why the shares are so weak, prob waiting for direction once results are out but expected more confidence than its showing in the share price to be honest..

[haywards26] 07/3/2019 13:00

I find the share price move and reduction in broker price targets strange, when we know from a financial performance point of view 2018 was a strong year and the best for a few years.

Hopefully next week and the issue of results will correct the share price anomaly.

[davethehorse] 07/3/2019 10:59

Berenberg price target on GEMD lowered this morning to 120p from 140p but buy rating stands.

[davethehorse] 07/3/2019 10:43

MMs really are shaking out weak holders pre results next week. Let's hope they are positive and GEMD breaks out. Low volume knocking it back to support levels.

[davethehorse] 03/3/2019 09:50

hxxps://78449.themediaframe.com/dataconf/productusers/gemdiamonds/mediaframe/25164/indexl.html

Register to view and listen and its from 7minutes, mentions from 2019 100+carat recoveries to be reported quarterly only so will come with results a week on Weds for this quarter.

[davethehorse] 03/3/2019 09:33

The other thing to note is that on many of the presentations I have seen during research the emphasis is often not on the really big stones over 100 carats but on the number of recoveries of stones in the 20 to 60 carat range which they say is their biggest earner overall. The big stones make all the headlines but are not necessarily the most important financially they say.

[davethehorse] 03/3/2019 00:13

Not sure but I think it may be due to the share price not reacting as strongly as thought to news when each stone is announced, maybe they think it will have more impact only quarterly but only guessing

[haywards26] 02/3/2019 22:10

Sounds strange, and also not in shareholders best interests.

What valid reasons could there be for such a news blackout? Were any given in the telecon? Surely the company would want to be issuing such positive news and news that would attract new shareholders etc.

[davethehorse] 01/3/2019 18:46

Any technical analysts out there.. is this a bullish chart, maybe a triple bottom type formation formed now at 100p level

[davethehorse] 01/3/2019 15:04

Expecting further late reported buys of those sells after the close. Wonder if GEMD are still considering buy backs, ideal time at this price.

[davethehorse] 28/2/2019 15:55

Some selling pressure today, noticed that buyers are mopping them up though.