October 31, 2018 / 7:34 AM / a year ago

UPDATE 1-Gem Diamonds raises full-year production target on strong output

(Adds details on quarterly production, background)

Oct 31 (Reuters) - Gem Diamonds Ltd raised its full-year production target on Wednesday after reporting a 16.2 percent jump in diamonds found during the quarter, as demand and prices for white rough diamonds remained strong.

The miner now expects to recover 120,000 carats to 124,000 carats of diamonds for the year, helped by improved mining and consistent grade recoveries during the third quarter. It had earlier guided to a range of 114,000 carats to 118,000 carats.

Gem also raised its diamond sales target to be between 118,000 carats to 122,000 carats in 2018, compared to a previous forecast of 112,000 carats to 116,000 carats. It also stuck to its target of $100 million in incremental revenue, productivity improvements and cost savings for a four-year period ending in 2021.

The London, UK-based company operates the Letšeng mine in the Kingdom of Lesotho and had last month posted a surge in first-half earnings as diamond prices recovered after a period of weakness.

Gem Diamonds recovered 35,755 carats during the quarter ended Sept. 30, higher than the 30,774 carats in the year-ago quarter, while diamond sales jumped 16.9 percent to 30,275 carats.

The company added that after the third quarter ended, it recovered the thirteenth diamond greater than 100 carats for 2018, resulting in the highest number of such recoveries in a single calendar year. (Reporting by Tanishaa Nadkar and Muvija M in Bengaluru; Editing by Bernard Orr)

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