The Letseng Mine in Lesotho is in a different category and is known for producing the finest diamonds in the world. Findings made on it in the past decade include seven stones weighing 300 to 600 carats, the largest of which were the size of a golf ball. And constantly on it find diamonds weighing 25 carats and above, which is completely inaccessible even to a very devoted groom.
Letseng is owned by Gem Diamonds, and she works in an exclusive section of the market, selling stones to super-rich people at tenders that are not attracting attention, which are held eight times a year in Antwerp, Belgium.
Firm Midas cited data that the shares of this company in July 2014 reached a price of 192 pence apiece. Currently, the shares are at 116.25 pence apiece, and at the beginning of last year fell below 100 pence. Shareholders were upset, but the prospects look good, the shares should again significantly strengthen in the next year and in the future.
Gem Diamonds was founded in 2005 by Chief Executive Officer Clifford Elphick. A man with an impeccable record of working in the diamond industry, he spent most of his career working for the Oppenheimer family, which had previously been associated with the diamond mining giant De Beers. Over the years, Gem Diamonds has gained a reputation for mining huge stones, but the year 2016 brought disappointment, mainly due to the fact that a few large stones were mined.
The situation should change in 2017, as Elfik and his team took measures to improve the situation. Firstly, they are mining in different locations on the Letseng site, which promises to be more productive. And secondly, they improved their equipment, ensuring the safety of precious stones in the process of crushing ore.
Letseng is an unusual mine in the sense that although it produces diamonds of exceptional size and quality, there are few of them, so this group is forced to crush hundreds of tons of rock to get a fantastic gem for it. The larger the stone, the more buyers are willing to pay for the carat, so it is extremely important that Gem can maintain the original size of its stones.
It is expected that Gem will also make progress at its other Ghaghoo mine, located in the center of the Kalahari Desert in Botswana.
Acquired in 2007, this mine is more conventional, designed rather to produce a large number of small stones, rather than to random huge stones. But on this site there were many problems, beginning with the financial crisis in 2008 until recently discovered underground groundwater and the collapse of sand in the mine.
Costs increased, diamond production was suspended, and large investors were upset. But the company is going to fully start production in the first half of this year, hoping for a profit.
In the past four years, the market for small diamonds has been weak, but at the end of last year there were signs of recovery. And the market for large diamonds is much more stable, as super-rich people, especially Asian moguls, are looking for them as a symbol of status.
Diamond tenders conducted by Gem are another reserve option, helping to sharply raise the rate of profit. Highly exclusive, only leading diamond buyers are invited, including Laurence Graff, a major shareholder of Gem, who is one of the world's most famous jewelers and is known as the "king of diamonds".
Brokers expect the profit of 2016 to be $ 45.4 million (£ 37.3 million), which is less than $ 99 million in 2015. But it is projected that it will increase by 18 percent this year to $ 53.6 million, and then in 2018 growth is expected. Also, following the results of 2016, it is expected to pay dividends of 4 pence per share, which will remain at the same level in 2017, ensuring a confident 3.4 percent of return on invested capital.
http://www.thisismoney.co.uk/money/investing/article-4143608/MIDAS-UPDATE-Gem-Diamonds-prepares-add-polish.html
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