LONDON (ShareCast) - (ShareCast News) - Gem Diamonds has recovered a high quality 202 carat, D colour type IIa diamond from its Letseng mine in Lesotho.
This is the seventh diamond of over 100 carats to be recovered in the year to date from Letseng, which is the highest dollar per carat kimberlite diamond mine in the world.

RBC Capital Markets said it values the stone at around $8m to $10m and expects this to buoy the average realised price into year end, assuming that Gem can prepare the stone in time to enter it into its final large tender of the year, which takes place between 29 November and 7 December.

"That said, a large stone of this nature could be sold separately. Regardless, with the shares trading at 0.66x NAV, we expect some of the current P/NAV discount to narrow this morning and help improve the H2 average price towards our current $2,100/ct estimate.

"Work still needs to be done at Letseng in terms of improving operational efficiencies and potentially reducing the cash consuming waste strip further, but today's announcement should provide some positive sentiment for the shares."

At 0945 GMT, the shares were up 3.3% to 77.75p.

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