Diamonds, News & Features, Resource News
Gem Diamonds Rises Most in a Week After Prices Boost Profit
By Bloomberg · August 19, 2011 · 9:47 am · Leave a Comment
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By Jana Marais
Gem Diamonds Ltd. (GEMD), a producer of the stones in Lesotho and Australia, rose the most in a week in London trading after reporting record first-half earnings.
Gem Diamonds climbed 4.4 percent to 190 pence as of 1:21 p.m. local time, the biggest intraday gain since Aug. 11.
Earnings before interest, tax, depreciation and amortization jumped to $90.8 million from $18.5 million a year earlier, the London-based company said today in a statement. Attributable profit rose to $28.9 million from $3 million, driven by higher diamond prices.
“We’ve seen much more demand than we can supply, especially for very expensive diamonds, which is where we operate,” Chief Executive Officer Clifford Elphick said in an interview. “We expect a pause in the rise in diamond prices. It is unlikely that prices will continue rushing ahead as they’ve done in the past year. But then it will get back in its upward phase.”
The mining company plans to start production at its Ghaghoo project in Botswana in 2013, and the board will decide in November whether to expand capacity to as much as double at its Letseng mine in Lesotho, Elphick said by mobile phone.
With assistance from Jana Marais in Johannesburg.
