GEM Diamonds, the company that owns the Letšeng Diamond has announced that the 2021 dividend of US$3.8 million (M 63, 792, 690.00) proposed by the board in March 2022 has been paid.
Sept. 1, 2022
3 min read
Letšeng pays over M63 million in dividends
Gem Diamonds CEO, Clifford Elphick
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The dividend was approved at the company’s annual general meeting on June 8.
In its latest trading update released last week, the company showed that during the period, 57 075 carats were sold, generating revenue worth US$ 99.6 million (and achieving an average price of US$ 1 745 per carat).
The highest price achieved in the period was US$ 66 059 per carat for an 8.41 carat pink diamond. A total of 15 diamonds were sold for more than US$ 25.8 million during the period.
“We continue to see a firm diamond market for the high quality Letšeng Diamonds in 2022. We are managing the economic impact of global events which are contributing significantly to the slowing down of global economic growth and which are materially impacting energy and commodity prices and disrupting supply chains worldwide.
“The sanctions imposed on the Russian diamond producer, Alrosa have exacerbated a shortage of rough diamonds in the market, supporting continued strong demand and robust prices for Letšeng’s high quality rough diamonds,” Gem Diamonds Chief Executive Officer, (CEO) Clifford Elphick said.
Three diamonds greater than 100 carats (244.34, 127.58 and 124.65 carats) were recovered during the period, and were sold in the first tender after period end for US$13.9 million.
Furthermore, the Group ended the period with US$ 24.2 million cash on hand while drawn down facilities amounted to US$ 12.1 million resulting in a net cash position of US$12.1 million at period end.
During the period, the company purchased 1 520 170 of its shares at a weighted average purchase price of 60.05 GB pence (78.07 US cents) per share under its share buyback programme. The shares are currently held as treasury shares.
Strong demand and robust prices achieved for Letšeng’s diamonds reflected the continued positive sentiment in the diamond market.
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Letšeng’s Plants treated a total of 2.58 million tonnes of ore during the period. Fifty three percent of which was sourced from the Satellite pipe and 47 percent from the main pipe.
In addition, 0.44 million tonnes of main pipe material were treated through the third party processing contractor, Alluvial Ventures. The contract ended on June 30, as planned.
Moreover, during the period, Letšeng experienced excessive rain, increased power disruptions on the energy supply network and negative impacts on the supply of critical parts and spares of equipment which impacted production.
However, the 2022 production metrics remain on track to be achieved, albeit the lower end of original guidance published in March. The related cost impact of disruptions to the supply chain, combined with significant increases in fuel, explosives and other consumables prices were experienced in the period, exacerbated by the Russia invasion of Ukraine.