GEM Diamonds Limited, a company that owns 70 percent of the Letšeng Diamond Mine has declared payment of US$ 3.9 million (M59, 56 million) dividends to the Government of Lesotho.
Feb. 4, 2022
3 min read
Letšeng pays govt M60m dividends
Gem Diamonds CEO, Clifford Elphick
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The company announced on Tuesday that strong prices achieved in the December tender for the Letšeng’s high value diamonds reflected a continued recovery of the global diamond market, which was supported by strong consumer demand.
In its fourth quarter trading update, the company said this trend had continued in the current year.
Among others, three diamonds greater than 100 carats were recovered to bring the total for the year to six.
During the period under review, Letšeng declared a dividend of US$ 13.0 million resulting in a net cash flow of US$ 8.6 million to Gem Diamonds and a cash outflow from the Group for withholding taxes of US$ 0.5 million and payment of the government of Lesotho’s share of dividend of US$ 3.9 million.
Gem Diamonds Chief Executive Officer (CEO), Clifford Elphick said all operational and cost metrics for financial year 2021 were achieved.
“It is pleasing to report that all operational and cost metrics for the financial year 2021 were within, or better than, guidance and we have delivered our four year US$100 million business transformation target,” he said.
During the quarter, Mr Elphick said prices achieved for Letšeng goods; averaging over $2 000 per carat were strong, reflecting the continued good demand for Letšeng production - especially for the larger higher quality diamonds.
Five diamonds were sold for more than US$1.0 million each, generating revenue of US$ 16.3 million during the period, bringing the total number of diamonds sold for greater than US$ 1.0 million to 21 for the year to date, generating revenue of US$ 62.5 million.
Letšeng’s statement was corroborated by the Central Bank of Lesotho (CBL), which also reported on Tuesday that in the third quarter, the current account was driven mainly by improvement in the goods account driven by increased exports of diamonds, clothing and textiles among others.
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The group ended the period with US$31.1 million of cash on hand (US$23.5 million attributable to Gem Diamonds) with utilised facilities of US$ 10.2 million, resulting in a net cash position of US$ 20.9 million compared to US$ 11.7 million net debt in the third quarter.
The Group-wide debt refinancing was successfully concluded during the period. An additional lender joined the lender group, bringing the total number of lenders to three, and the Group’s revolving credit facilities were increased from US$ 61.3 million to secured facilities of US$ 77.0 million, in dollar equivalent.
US$ 32.3 million of the facilities are sustainability linked loans where the margin and resultant interest rate will decrease subject to the Group meeting certain carbon reduction and water conservation Key Performance Indicators (KPIs) that are aligned with the Group’s sustainability strategy.