Giant Diamonds: Mining’s Top Success Story for This Year
This Summer’s crash in commodity prices is turning it into a year to forget for miners. Unless, that is you dig the world’s biggest diamonds.
Gem Diamonds Ltd. (OTCMKT:GMDMF) has been the standout performer in the FTSE All-Share Mining Index, gaining almost 70% this year. In comparison, almost every other miner is in negative territory; the 2nd-best performer BHP Billiton (NYSE:BHP) Ltd. little changed, as growing concerns about trade and collapsing metal prices reversed an industry rally earlier in the year.
Gem Diamonds, which has struggled for years with failed growth plans and problems recovering big diamonds without breaking them, has had a resurgence this year as it successfully unearthed a record number of 100-carat-plus stones. That helped the company report an 81% jump in 1-H Y 2018 revenue, with operating profit climbing 5X.
The company operates the Letseng mine in the mountainous Kingdom of Lesotho in Southern Africa. The Letseng mine is famous for producing the world’s most valuable stones, with an average price of $2,742 a carat, that is more than 3X the next closest major mine. De Beers, a private company, the world’s biggest producer, has an average price of $162 per carat.
This year has also been Gem Diamond’s best ever for size: the 910-carat Lesotho Legend (pictured above) found in January was the 5th-biggest in history and sold for $40-M at a tender in Antwerp.
World’s Top diamond producer by output Alrosa (MCX:ALRS) is stepping up efforts to tap into the Chinese fancy diamond market in an attempt to catch up with main rival De Beers in a market that has shown stable growth.
|OTCMKT:GMDMF||1.48||6 September 2018||0.08||1.48||1.48||1.48||200|
|HeffX-LTN Analysis for GMDMF:||Overall||Short||Intermediate||Long|
|Neutral (-0.16)||Neutral (0.07)||Neutral (-0.20)||Bearish (-0.36)|
Have a terrific weekend