London, England — MININGREVIEW.COM — 01 September 2008 – Gem Diamonds Limited – a global diamond producer pursuing an accelerated growth strategy through targeted acquisitions and the development of existing assets – is moving downstream in the diamond business through the establishment of its own cutting and polishing operation.
Announcing its half-year results here, the company revealed that it had recruited the Antwerp-based Matrix Diamond Technology executive team, which was responsible for developing the world’s most sophisticated and advanced diamond mapping technology. When applied to large complex rough diamonds, such as those recovered at the LetÅ¡eng mine, this technology had the ability to enhance the polished yield.
The announcement added that Gem Diamonds had also acquired the intellectual property from Matrix and had purchased its machinery to set up the beneficiation centre in Dubai. The implementation of the beneficiation strategy came after Gem Diamonds had undertaken several trials on diamonds from its LetÅ¡eng and Ellendale mines.
Gem Diamonds explained that Matrix Diamond Technology had cut and polished the rough diamonds under contract before the stones had been put up for sale by tender in Antwerp. The extra margin achieved by polishing the rough diamonds had averaged 30% but the trials had also achieved up to 100% margin uplift for some diamonds.
The value uplift of polishing rough diamonds was recently demonstrated by the sale of the 603ct “Lesotho Promise” which was recovered from Gem Diamonds’ LetÅ¡eng Mine in Lesotho in September 2006, and sold to Bond Street Jeweller Lawrence Graff for US$12.4 million (R93 million).
The Lesotho Promise was cut into 26 individual diamonds totaling 233 carats on which Graff reportedly set a price-tag of US$50 million (R375 million) for the entire collection.
The company announcement went on to reveal that, in addition to setting up a cutting and polishing operation, Gem Diamonds was exploring the establishment of off-take agreements from its Ellendale mine, which produces stunning fancy yellow diamonds. These agreements with global top end jewellery retailers would enable Gem Diamonds to share in the diamond value chain beyond the mine gate.
Gem Diamonds chief executive Clifford Elphick commented: “Our LetÅ¡eng mine in Lesotho produces 60% of the world’s large white high quality rough diamonds. These stones, together with the rare fancy yellow diamonds produced from the Ellendale mine in Australia, give us plenty of high quality rough diamonds to polish and sell to retailers all over the world. It will also provide an additional source of revenue and margin for the company,” he concluded.