Gem Diamonds welcomes price increase

10th May 2010 07:55

Strong demand pushed up diamond prices during the first quarter of 2010, Gem Diamonds said today."The better than expected Christmas sales in the US, restocking in the cutting centers and continued strong demand for diamond jewellery in India and China have resulted in strong rough and polished diamond prices," boss Clifford Elphick wrote in a trading update."It is pleasing to note that improved consumer demand in the quarter is impacting positively on polished prices, which have risen, albeit not as sharply as the rise in rough prices. The fundamentally positive supply demand picture remains." Its Let?eng mine in Lesotho sold 15,468 carats at an average price of US$1,753 per carat in the first quarter, up from US$1,017 a year earlier. The Ellendale mine in Australia sold a combined total of 32,286 carats at an average price of US$489 per carat compared with US$102 per carat in 2009.Over at Gope in Botswana, bought from De Beers and Xstrata in May 2007 for US$34m, the total contained resource carats have increased by 1.2m carats to 20.5, carats following an increase in grade from new statistical modelling and also an increase in volume through re-interpretation of drilling results.The total in situ value of the resource has increased by 27% to US$3.3bn.Cost cutting measures helped the company move into profit last year despite a slump in revenue on weaker diamond prices.