Gem Diamonds may not hold a rough diamond tender in December and is reconsidering the way it runs these tenders given the fall in diamond prices, a statement issued by the company said.
The Letseng mine in Lesotho, in which Gem Diamond has a 70 percent stake, saw the average value of rough diamonds fall from $2,512 per carat in the first half of the year to $1,382 per carat in the October and November tenders.
Large diamonds, which make up more than 80 percent of total revenue, have fallen 24 percent just since the third quarter.
According to a broad strategic review, the company concluded that its short-term objectives should be on maintaining and improving long-term profitability, optimizing returns from existing production sources, and minimizing all nonessential capital and project development expenditures.
As part of the reevaluation the company is stopping all alluvial and dredging exploration in the Democratic Republic of Congo, although it is continuing kimberlite exploration work in the country. Similarly, all bulk sampling in the Central African Republic has been curtailed.
In Botswana, approval has been granted for the Gope mine in the Central Kalahari Game Reserve, and evaluation is being continued at Chiri, Angola.
Gem Diamonds added that it is in discussions with a leading jewelry manufacturer and retailer to extend the current off-take agreement for the entire fancy yellow production and a small quantity of better quality white goods from its Ellendale Mine in Western Australia.