Gem Diamonds Share Discussion Threads

[thomasthetank1] 17/5/2016 13:09

Read share price Angel's note on GEM DIAMONDS LTD (GEMD), out this morning, by visiting hxxps://www.research-tree.com/company/VGG379591065

"Gem Diamonds reports “A strong start to the year with production in line with plan”. Production from the 70% owned Letseng mine in Lesotho of 28,698 carats during the quarter ending 31st March 2016 is 28% higher than the March 2015 quarter and only 1% below the preceding Q4 2015 output of 29,100 carats. The higher output compared to Q! 2015 was a combination of a 14% increase in the tonnage treated (1.625m tonnes) and a 12% increase in grade to 1.77 carats per hundred tonnes (cpht)... Gem Diamonds is on track at its Letseng mine and with the downsizing of it Botswana operation at Ghaghoo. The company reports a cautious stance on the diamond market as a result of high inventory levels, weak Chinese retail demand and the strength of the SU$..."

[ukgeorge] 17/5/2016 10:42

SP Angel summary

Company News
Gem Diamonds (GEMD LN) 135.75 pence, Mkt Cap £187.7m – Q1 Production in line with plan; cautious view on the diamond market
• Gem Diamonds reports “A strong start to the year with production in line with plan”. Production from the 70% owned Letseng mine in Lesotho of 28,698 carats during the quarter ending 31st March 2016 is 28% higher than the March 2015 quarter and only 1% below the preceding Q4 2015 output of 29,100 carats.
• The higher output compared to Q! 2015 was a combination of a 14% increase in the tonnage treated (1.625m tonnes) and a 12% increase in grade to 1.77 carats per hundred tonnes (cpht).
• Prices received over the first three tenders of Letseng diamonds averaged US$1938 per carat for the 45,311 carats sold compared to an average price of US$2157 per carat for the 35,940 carats sold in the first three tenders of 2015.
• Lower production at the Ghaghoo mine in Botswana (11,029 carats vs 11,559 carats in Q1 2015 and 25,294 carats in Q4 2015) reflects the decision to downsize operations to the 300,000 tpa level for 2016. “Although Ghaghoo will operate at a reduced production rate during 2016, prices for the Ghaghoo production will continue to be monitored and the option of returning to full production regularly reviewed.”
• Sales for Ghaghoo amounted to US$160/ carat for the 14,114 carats sold during the quarter. The price is “some 7 percent above the previous price achieved in December 2015.”
• Commenting on the state of the diamond market, the company highlights the “continued slowdown in Chinese retail demand, a strong US dollar and reports of continued high levels of polished inventory” as reasons for continuing caution in the purchasing of rough and polished diamonds.
• Excluding the receipts from the third diamond tender, Gem Diamonds reports that it held US$60.6m in cash at the end of the quarter.
Conclusion: Gem Diamonds is on track at its Letseng mine and with the downsizing of it Botswana operation at Ghaghoo. The company reports a cautious stance on the diamond market as a result of high inventory levels, weak Chinese retail demand and the strength of the SU$.

[undervaluedassets] 17/5/2016 10:27

Good update I thought.

Tenders in Antwerp brought in more money than this time last year.

As we were told at the full year Gaghoo is being temporarily scaled back; seems prudent given that the market for more ordinary stones is soft. (this is not new news folks)

Meanwhile Letseng makes more money than last year .

Pretty solid really -

[woodpeckers] 17/5/2016 09:39

I don't think there's any question that Gaghoo has been a bit of a disaster. Not surprising to hear that they are after the Mothae mine near Letseng. It would be great to get that and dump Gaghoo.

[clinton baptiste] 17/5/2016 09:18

One thing that's clear from these results is that Gaghoo is hopelessly uneconomic. No wonder they are scaling back. Shuttering the mine completely might be a wiser course of action
The recovered grade and diamond value of 22cpht and $160/ct respectively, are both mediocre. There seem to be hardly any special stones over 10.8cts to raise the average price. So, they are sitting with $35/tonne rock, 80m below surface in the central Kalahari (where there is nothing), and with water and sand pouring into the mine. Meanwhile, Lucara's Karowe mine (a few hours drive to the north) is 15km from the large town of Letlhakane, on grid power, at surface, mined on a much bigger scale in an open-pit using contractors, and their all-in cash costs per tonne of ore treated are still ~$30!

[weemonkey] 17/5/2016 09:15

hxxp://www.hullloansystem.com/the-rapaport-100-carat-diamond-club-registry/

[weemonkey] 17/5/2016 09:04

hxxp://www.diamonds.net/News/NewsItem.aspx?ArticleID=57152&ArticleTitle=Antwerp%2bOptimistic%2bas%2bApril%2bRough%2bTrading%2bClimbs

Antwerp says April has been strong for rough

[woodpeckers] 17/5/2016 07:57

Interesting comparison, undervaluedassets, thanks for that.

Another set of good results today too.

' Letšeng:

Strong start to the year with production in line with plan. Prices steady for higher quality goods.

-- Recovered 28 698 carats during the Period (reflecting a 28% increase on the first quarter of 2015). '

[weemonkey] 16/5/2016 15:21

Agree. . .Take a look at Tobin's Q too 0.37 or something? Nothing wrong with PDL but the value play is here IMHO

[weemonkey] 12/5/2016 11:35

I think that people DO panic on xd days. Blind sided weak holders sell.

So do computor trading bots; As they are fundamentally automated trend chasers they don't pick up xd dates either. . they just mindlessly sell the price decline.

[woodpeckers] 12/5/2016 08:29

No problem fly. 6p banked and hopefully continue the climb! Can't be much longer before we hear from the mining minister regarding Mothae, usual slow turning wheels....

[p_dharmendra] 12/5/2016 08:20

Hmm As ex dividend date Now onwards up journey start

[woodpeckers] 12/5/2016 08:07

Ex Div today, hence the drop.

[woodpeckers] 06/5/2016 16:53

I'm with you there George!

[ukgeorge] 06/5/2016 16:18

roll on £2 and more dividends :)

[woodpeckers] 06/5/2016 14:13

Interesting article out today about mining in Lesotho.

[ukgeorge] 06/5/2016 10:38

nice consolidation getting ready for thee next leg up.

Lucara diamonds, have been flying recently hopefully the whole sector will follow

[woodpeckers] 28/4/2016 15:25

No problem. I think Gem are in with a very good chance if Paragon don't get it. They have a proven record with the minister and Letseng's proximity to Mothae will offer great synergies.

[ukgeorge] 28/4/2016 15:06

thanks for those

[woodpeckers] 28/4/2016 14:09

George, here are a couple of links for you.

[ukgeorge] 28/4/2016 10:54

Great thanks

[woodpeckers] 28/4/2016 10:46

Hi George, definitely good for gem if they get it though I'm a paragon holder as well so would rather they get it as they need it more. Afraid I'm out and about at the mo so can't post info but will do so when I get home this afternoon.

[ukgeorge] 28/4/2016 10:46

Will buy back in soon, hoping for 130 or 125p