Gem Diamonds shares sparkle as a 114-carat find calms investors' fears of a lack of large diamonds

Courtney Goldsmith
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Lesotho is emerging as a significant new diamond producer in Africa
Lesotho is emerging as a significant new diamond producer in Africa (Source: Gem Diamonds)

Gem Diamonds' shares were sparkling today after it announced it had unearthed a 114-carat diamond from one of its mines.

The miner's stock jumped 7.56 per cent to 96p when it said it recovered a D colour Type II diamond of "exceptional" quality from its Letseng mine in Lesotho.

"We expect that management will have heaved a big sigh of relief – hopefully, this marks the end of the recent prolonged period of 'paucity' of large high-value diamonds, which saw 2016 revenues take a 25 per cent hit and resulted in the company’s shares trading at all time lows," said Yuen Low, analyst at Shore Capital.

The Letseng mine in southern Africa is renowned for producing large, top colour exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world, the group said.

Gem Diamonds acquired Letseng in 2006, and since then it has produced four of the 20 largest gem-quality white diamonds ever recorded.

Read more: This flawless pink diamond has fetched a record-breaking price at auction

This marks the second large discover made in Lesotho this week.

Firestone Diamonds announced the recovery of its largest diamond to date from the Liqhobong mine in Lesotho Wednesday, causing its shares to pop.

The 110-carat, gem-quality light yellow diamond confirms the significant larger stones potential that exists at the mine, Firestone said.

"I hope this is the first of many to come," said chief executive Stuart Brown, an ex-chief executive of mining giant De Beers.

(Source: Firestone Diamonds)

Read more: A weakening diamond market has pushed this producer to mothball a mine

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