Gem Diamonds Rises Most in 9 Months as Prices Boost Profit
Gem Diamonds Ltd. (GEMD), a producer of the stones in Lesotho and Australia, rose the most in nine months in London trading after reporting record first-half earnings.
Gem Diamonds closed 7.4 percent higher at 195.50 pence, the biggest increase since November 2010.
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 double capacity at its Letseng mine in Lesotho, Elphick said by mobile phone.
To contact the reporter on this story: Jana Marais in Johannesburg at jmarais@bloomberg.net
To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net
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