London-listed diamond producer Gem Diamonds said that, owing to lower quality diamonds mined at its Letseng mine in Lesotho, its output for Q1 2013 had fallen by 38% to 18 775 ct, compared to 30 181 in Q4 2012.As anticipated, this quarter was in line with our reduced expectations for grade and quality. Throughput was relatively low, albeit planned. Rough diamond prices have improved over the quarter, but this is not reflected in our results because of the lower quality diamonds mined so far this year. As communicated previously, mining at Letseng this year has been restricted to the lower grade and lower value section of the Main pipe .Mining will return to the higher value satellite pipe at the end of Q2 this year. It is anticipated that this will result in improved revenues for the remainder of 2013, explained Gem Diamonds CEO Clifford Elphick. Further, the average value per carat sold decreased by 6.1% to $1 599/ct, compared to $1 703/ct in the previous quarter. However, the company reported that the volume of diamonds sold increased by 3.1% quarter-on-quarter to 29 205 ct sold in the three months ended March, compared to the 28 324 ct sold in the December 2012 quarter.
Meanwhile, Gem Diamonds advised that the procurement and installation of the new secondary crushers for Plants 1 and 2 is underway and on target for installation by the end of Q2 2013, adding that it expected that these crushers to contribute significantly to reducing diamond damage, resulting in improved revenue.Work is ongoing in terms of revising Project Kholo implementation options, production levels and waste stripping profiles. Indicative costs, timelines and updates will be provided during the course of Q2 2013. Work at the Ghaghoo project has progressed to the point where the country rock has been reached which will allow for better rates of progress using conventional drill and blast methods, said Elphick.