LONDON (ShareCast) - (Sharecast News) - Gem Diamonds rejigged its 2019 guidance on Tuesday as it reported a 10% drop in third-quarter carats sold and said the mining licence for the Letseng mine in Lesotho has been renewed.
In an update for the period from 1 July to 30 September, the company said carats sold fell to 25,631 from 28,379 in the second quarter, while the total value declined 15% to $36.3m and the price achieved per carat slipped 6% to $1,417.

Chief executive officer Clifford Elphick said: "Letseng's high-value large diamond production has experienced price pressure during the period. This, together with diamonds sold from the lower value ore mined in the previous quarter, resulted in an average price achieved of 6% lower than the previous quarter."

Gem updated its guidance for 2019. It now expects carats sold for the year to be between 111,000 and 113,000, down from previous guidance of 115,000 to 119,000. However, total capex was cut to between $11 and $13m from $18m to $20m.

During the quarter, Gem recovered four diamonds greater than 100 carats, bringing the total for the nine-month period to seven. It also sold five diamonds for more than $1m each, generating revenue of $11m.

The company said its Letseng mine mining licence was renewed for an immediate period of 10 years, with an exclusive right to renew for a further 10-year period.

Broker Liberum said: "There is very little optimism that the market is going to turn in the short term, but Gem Diamonds is relatively well positioned to weather the storm and will benefit from any supply shocks that are undoubtedly coming."

At 1100 GMT, the shares were up 2.9% at 63.07p.

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