“The market for Letšeng’s high-quality diamonds has remained firm and this is anticipated to continue into H2, 2017,” comments Gem Diamonds CEO, Clifford Elphick.
“In addition, the revised life-of-mine plan was implemented during February, with the objective of reducing waste tons mined, improving near term cash flows. We expect to see the benefits emerge during 2017.”
Letšeng treated a total of 1.4 Mt of ore during the period, 75% of which was sourced from the main pipe, and 25% from the satellite pipe. The balance of the ore was treated through the alluvial ventures contractor plant, which was sourced from the main pipe and low grade stockpiles.
During Q1, 2017 engineering challenges were experienced at both of Gem Diamonds’ Letšeng plants that resulted in lower than planned plant availability. As a consequence, tons treated in the period were 76 000 tons lower than planned.
The temporary plant availability challenges are being addressed with the contracting partner, and full year guidance remains unaltered. The contribution from the satellite pipe is expected to meet the original target of 1.8 Mt for the full year.
Gem Diamonds reports that during the period, 25 479 carats were recovered at a grade of 1.53 cpht against an expected reserve grade of 1.61 cpht mainly due to the under performance of the main pipe contact material, which resulted in a mine call factor of 95%.
Mining activities have moved to the centre of the main pipe and grades are returning to expected levels. During Q2, 2017 mining in the main pipe is moving into the higher grade K6 portion of the pipe states Gem Diamonds.
The splitting of the front ends of plant 1 and plant 2 was completed at the end of the period. This has facilitated the treatment of discrete ore samples based on their individual geo-metallurgical characteristics to better understand the performance of the resource.
Three tenders have been held by Gem Diamonds in 2017. 39 950 carats were sold for US$65.4 million, achieving an average price of $1 636 per carat. In line with the sales and marketing strategy, the lower-value smaller commercial production is accumulated and carried over for a larger volume sale once every quarter.
This production will be sold in the fourth tender to be held in June and has been included at an estimated value in determining the average $/ carat for the first three tenders of 2017.
The current average price achieved is up 13% from the $1 444/carat achieved in the previous period, Q4, 2016.
Contributing to the achieved $/carat was an 8.65 carat pink diamond which achieved $164 855/carat, making it the sixth highest $/carat achieved by a Letšeng rough diamond, together with the sale of a number of other large high value white diamonds including a 114.38 Type II carat diamond which was sold into a partnership arrangement in May 2017.
All images courtesy of Gem Diamonds
Feature image: A 114 carat, D colour Type II diamond of exceptional quality from Letšeng mine in Lesotho