A 3.09-carat rectangular-cut Fancy Intense Blue diamond sold for more than $5.375 million at Christie’s New York Magnificent Jewels auction last Tuesday, setting a world record price for an intense blue diamond at $1.739 million per carat, nearly doubling its pre-sale high estimate of $2-$3 million. The very next day, a cut-cornered rectangular step-cut Fancy Intense Blue diamond weighing 3.47 carats broke the short-lived record by selling for $6,663,300, or $1.920 million per carat, at Sotheby’s Magnificent Jewels Auction, nearly tripling its pre-sale estimate of between $2 million and $2.5 million. The blue rock was previously owned by an anonymous midwestern family.

The Christie’s gem is set with a rectangular-cut fancy intense blue diamond, weighing approximately 3.09 carats, flanked on either side by a tapered baguette-cut diamond, ring size 6, mounted in platinum. The auction of 211 lots achieved more than $45.6 million, with 88% sold by lot and 96% by value. The sale featured a Fancy Intense Pink Diamond ring weighing 8.42 carats that sold for just over $5 million, and a twin-stone colored diamond crossover ring set with a 2.85-carat pear modified brilliant-cut fancy intense pink diamond, and a 2.42-carat pear brilliant-cut fancy vivid blue diamond sold for more than $4.5 million, within estimates. Two notable jewels by JAR included an Oval-Cut Diamond ‘Thread’ Ring – named for the perceived lightness of the setting and fine pavé work – featuring an elongated oval brilliant-cut diamond weighing 22.76 carats and of D color and VVS1 clarity, and a diamond-set two-tiered threadwork gallery and hoop mounted in platinum, which sold for more than $2.7 million, within estimates. A Multi-Gem and Diamond ‘Moghul’ Pendant Brooch sold for $432,500, going for well above its pre-sale estimate high of $300,000. Both items were auctioned to benefit the Art for Justice Fund, which connects criminal justice advocates with artists to help reform the criminal justice system in the United States.

The Sotheby’s auction, meanwhile, totaled $26.2 million, featuring a 72.96-carat diamond bracelet, which sold for $1.4 million, and a 13.70-carat Tiffany & Co. diamond ring, which yielded $1.2 million, beating its estimate of $600,000 to $800,000. Sotheby’s achieved $34 million across three sales that made up its New York spring auctions, and the combined auctions were 83.3% sold by lot, according to Rapaport.

London-based miner Gem Diamonds has announced that the government of Lesotho, represented by the Prime Minister and Minister of Mining, has confirmed their intention to renew the mining lease of the high-value Letšeng mine until 2034. The mining lease may be further extended if necessary in relation to any underground development of the mine thereafter. The full terms of the renewed mining lease are subject to a statutory negotiation process with the Lesotho Mining Board and, when agreed, will be contained in a new mining lease agreement. A further announcement will be made once the statutory negotiations have been concluded and a new Letseng mining lease has been issued.

Gem Diamonds’ CEO, Clifford Elphick commented: “The Lesotho Government’s announcement that they intend to renew the Letšeng mining lease until 2034 is welcomed as a demonstration of the positive partnership which exists between Gem Diamonds and the Government.  I would like to thank the Government of Lesotho for their ongoing support which will allow Gem Diamonds to continue to extract some of the world’s largest and most valuable diamonds from this remarkable resource.”

Johannesburg Stock Exchange (JSE)-listed junior diamond miner Trans Hex has agreed to terms for the sale of its Baken and Bloeddrif mines, both of which are situated on the banks of the lower Orange River (LOR) in South Africa, to Lower Orange River Diamonds Proprietary Limited for $6 million (R72m) in cash, and its shareholders appreciated the gesture. Miningmx reports that speculation on the deal drove Trans Hex’s share price up 52% ahead of yesterday’s announcement which came after the close of trading on the JSE. Neither of the mines is currently operating, as both were placed on care and maintenance in 2017. The company said it, “made every effort to sustain operations at Baken Mine, however the mine’s low carat production and subsequent financial losses were considered to be unsustainable.”

The Baken operation lost over $11 million (R137.5m) in the six months to end-September – which included a provision for retrenchment costs – and had lost $3 million (R35.8m) in the year to end-March 2017. Bloeddrif lost $5 million (R60.1m) in the six months to end-September and $4.5 million (R55m) in the year to end-March 2017. Trans Hex explained the sale by saying it has been, “directing its efforts towards securing a sustainable future for the LOR Operations under a potential new dispensation, including exploring all reasonable ways and means of avoiding or minimising enforced retrenchments. Accordingly, the Transaction provides the Company with an opportunity to implement its strategy for the LOR Operations as well as provide the Company with additional capital that can be applied to fund its working capital requirements.”

A statement by Trans Hex describes Lower Orange River Diamonds as a “Black Woman Owned company” (as defined in terms of the Broad Based Black Economic Act) indirectly holds minority interests in a small portfolio of “greenfield” prospecting rights for diamonds which are being readied for initial exploratory drilling operations. The statement adds that, “LOR Diamonds’ management team has extensive knowledge of and experience in the diamond exploration and mining industry but is currently not engaged in other diamond mining operations. LOR Diamonds intends implementing new mining techniques and recovery processes at the LOR Operations, as well as ongoing and innovative environmental rehabilitation in respect of the disturbed surface area, which it is confident will be both cost-effective and sustainable.” Trans Hex will receive just over $4 million (R50m) in cash within seven days of signing the sales agreement with the rest to be paid in deferred payments of $230,000 (R2.75m) each over a period of eight months starting five months after the agreement is signed.

Firestone Diamonds, which mines the Liqhobong mine in Lesotho (75% Firestone, 25% government of Lesotho) reports an increase in production during the third fiscal quarter ended 31 March 2018, as the higher grade led to a 6.6% rise in diamond recoveries despite challenging conditions due to above average rainfall during the wet season. The young miner recovered 192,604 carats (Q2 180,709 carats, Q1: 199,007 carats), from 869,126 tons of ore treated (Q2: 963,213 tons), reflecting the treatment of higher grade ore yielding 22.2 carats per hundred tons (“cpht”), higher than 18.8 cpht in Q2 and 20.6 cpht YTD. A further increase in grade is expected in the final quarter of FY2018 as mining of higher grade areas of the pit resumes. During the quarter, Firestone recovered 93 specials (plus 10.8 carats) (Q2: 80) which, they say, “was encouraging although, overall, the average quality still remained somewhat below expectation.”

A total of 217,380 carats were sold in Antwerp during the quarter (Q2: 156,942 carats), with the sales achieving an average value of US$81 per carat (Q2: US$80 per carat), yielding proceeds of US$17.6 million (Q2: US$12.5 million). They note that the rough diamond market continued to strengthen during the first quarter of 2018, with confidence returning after a successful retail season. Very competitive bidding was seen at the sales in Antwerp, together with continued price recovery on the lower category run of mine goods. Supply of lower value goods across the market is still plentiful but better quality goods are in demand as are fancy colours, evidenced by the strong demand for the special fancy pink and yellow stones that were offered by Liqhobong.

Cautious optimism in the market, challenges for operations

Firestone further notes that positive retail numbers from the US and China give rise to cautious optimism on rough diamond pricing for the balance of 2018. “This is of course predicated on the supply of rough diamonds remaining in balance with demand. If major producers remain responsible and global macro conditions remain supportive then there is some cause for cautious optimism that the confidence in the rough market will continue through the remainder of the year with sustained improvement in rough prices”, the company states. CEO Stuart Brown adds, “Despite experiencing several disruptions during the quarter due to heavy, above average rainfall, the orebody has started to deliver the higher grades we have been expecting and so carats produced increased compared with the previous quarter. In the first nine months of the financial year, Liqhobong has recovered fewer carats than planned due to the adverse weather and higher water levels in the main pit, particularly in February and March, which restricted access to the higher grade ore blocks. We still expect to achieve annual production at the lower end of guidance of 800,000 to 850,000 carats, as mining progresses in the higher grade ore.”

As announced in December 2017, Firestone is pursuing a revised mine plan with the objectives of delivering the best returns in the medium term at low risk whilst at the same time offering the optionality of taking advantage of the longer life of mine potential of the Liqhobong orebody should realised diamond values increase or should there be a sustained improvement in market conditions. They say they are making good progress on delivering this plan, and in the first three months of the revised plan they realised slightly better values of US$81 per carat due to a combination of better rough market conditions and the recovery of a few exceptionally valuable small fancy coloured stones. The achieved prices are up from a Q1 low of US$69 per carat, and gradually moving toward the original estimate of an average base value of $107 per carat. Firestone continues to plan for mining to progress across the pit over the next 15 months, which will provide a truer representation of diamond quality and pricing than has been possible from the access to limited production areas during the ramp-up period.