Gem Diamonds sees sales fall from Lesotho mine

Gem Diamonds has seen the value of sales from its biggest mine in the Southern African state of Lesotho fall dramatically in the first three months of the year.

The total number of carats sold at the Letseng mine fell 3% compared to the same period of 2011 but the total value of those sales was only $58.7m compared to the $94.3m achieved in 2011, a fall of 38%. The value per carat of diamond sold dropped 35.6% to $1,976.

The company says this figure arose from comparison to a period last year when "a number of exceptional fancy coloured and white diamonds were recovered and sold." The company also argues ore bodies (the parts of the ground from which diamonds are extracted) always demonstrate "natural variability".

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Gem's other big site, at the Ellendale mine in Australia, performed better with total sales up by 46.4% on the corresponding period of 2011 to $24.3m, while the amount achieved per carat more than doubled from $511 to $1,049.

Gem's share price has gained 36% since the start of this year although it is still nearly 4% down over the last 12 months.

BS