Gem Diamonds Share Discussion Threads

[davethehorse] 15/3/2019 07:44

Something that did come out of the conference call on Wednesday was that they are mining a lower grade ore area in the first 6 months of 2019 and that the 2nd half was expected to yield better stones than the first. That said the lower grade ore can yield some nice stones as they have found before. The main thing holding the shares back is probably sentiment in the sector with diamond prices but GEMD should not be as exposed to that as most with the high quality stones they recover.

[davethehorse] 14/3/2019 17:04

Who knows, really have no idea which direction its going, on all known info it shouldn't be going down but the market seems to think otherwise. There should be some good news flow in the next few months, the extension of the mine lease and the sale of the mine in Botswana, both should generate a positive share price reaction on release (I hope!)

[ukgeorge] 14/3/2019 16:01

80p looks like the logical place for strong support on the chart. Although hopefully a bounce will come before that.

[ukgeorge] 14/3/2019 15:58

they could dig up the ark of the covenant and the shares would still fall......

[davethehorse] 14/3/2019 11:09

Personally from the research I have done I expect diamond prices to start improving from this year across the board with several mines closing over the next few years reducing the number of diamonds on the market. Letseng's quality diamonds are always going to sell well to their clients and I dont see this price weakness reported by Rapaport effecting GEMD too much.

[ukgeorge] 14/3/2019 10:56

From share price Angel

Gem Diamonds (GEMD LN) 94.8p, Mkt Cap £125.3m –Pink diamond sale sets record price per carat for Letseng mine

• Gem Diamonds reports that the sale of a 13.33 carat pink diamond from the Letseng mine for a total of US$8,750,360 has realised a “record dollar per carat price of US$656,933 for a Letseng diamond”.

• To put this sale into context following the release of the company’s 2018 annual results yesterday, this single diamond has realised the equivalent of approximately 3% of the company’s 2018 revenue of US$267m.

• We note that in the March 2019 edition of the highly respected specialist diamond industry “Rapaport Magazine” the “RapNet Diamond Index” shows a declining trends in the prices of both the larger stones greater than 3 carats in size and in the smaller stones less than 0.3 carats.

• Index levels for the smaller stones have declined by 0.33% during the month to 10th March and by 9.11% over the year while the larger stones are shown to have declined by 0.52% over the month and by 6.51% annually.

• Intermediate sizes of diamonds appear to have shown greater price stability with 0.50 carat stones declining 2.87% and the 1 carat diamonds declining by 2.61% respectively over the year.

Conclusion: The Letseng mine continues to deliver large, valuable and high quality diamonds and despite softening in some parts of the diamond market we expect unique diamonds like the recently sold pink stone and the 15 stones larger than 100 carats produced by Letseng last year to continue to command premium prices

[davethehorse] 14/3/2019 10:19

Get the impression there is a market overhang in the background, shares are too weak, must be a reason IMO..

[ukgeorge] 14/3/2019 09:45

I just bought 10,061 at 93p

[ukgeorge] 14/3/2019 09:22

Wow that is pretty dam good

Thursday, 14 March 2019

Gem Diamonds Limited (LSE: GEMD) is pleased to announce that a 13.33 carat pink diamond recovered at the Letšeng mine in February 2019 has been sold on tender in Antwerp for US$ 8,750,360. This represents a record dollar per carat price of US$ 656,933 for a Letšeng diamond.

A picture of this pink diamond may be viewed on the Company website

[haywards26] 14/3/2019 09:21

Further positive news, yet the share price remains in the doldrums and unmoved....

[davethehorse] 14/3/2019 08:33

Great price for the pink, shows its not just the big headline making 100+ carat stones that make good money. Let's hope the market responds positively to the news, mild + response so far today

[davethehorse] 13/3/2019 17:38

The sells are being snapped up in late reported trades of late, either a fund or share buy backs?

[davethehorse] 13/3/2019 16:18

Yes very disappointing share price reaction but will continue to hold, long term they still look very good.

[haywards26] 13/3/2019 15:26

Frustrating as I bought some trading stock in addition to my long term holding that I was expecting to sell for a 20% profit on issuing of the results...

[davethehorse] 13/3/2019 11:19

All sounds positive longer term but for now it seems until the 1st quarter news is released the shares will remain around these levels. The pink 13 carat found in Feb sells today.

[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.