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02 Feb 2021 | 07:39

Gem Diamonds ends 2020 on high as demand improves

(Sharecast News) - Gem Diamonds updated the market on its fourth quarter on Tuesday, reporting a further increase in its net cash position, ending the period with net cash of $34.2m, up from $1.1m at the end of the prior quarter. The London-listed firm said its operational guidance metrics for the 2020 full year were achieved, adding that during the quarter, four diamonds greater than 100 carats were recovered to bring the total for the year to 16.

Its average price achieved in the period was $1,907 per carat.

A total of 99,172 carats were sold in the year, achieving an average price of $1,908 per carat, up from $1,637 per carat in the prior year.

During the period, 10 diamonds were sold for more than $1m each, generating revenue of $22.6m during the quarter.

That brought the total number of diamonds sold for greater than $1m to 34 for the year.

Diamond prices achieved in the quarter were higher than those realised before the onset of the Covid-19 pandemic in the first quarter of 2020, the board reported, reflecting an overall improvement in market conditions.

"The average price of $1,908 per carat for the year demonstrates the strong demand for Letšeng's high value and quality large diamond production," said chief executive officer Clifford Elphick.

"The prices achieved on a like-for-like basis are higher than those realised in the pre Covid-19 market conditions of the first quarter of 2020.

"This, together with the continued proactive cost control and cash preservation measures implemented across the group, has resulted in an increased positive cash flow for the group during a most difficult time for the diamond industry."

At 0852 GMT, shares in Gem Diamonds were up 4.01% at 52.22p.
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