Mining company Gem Diamonds, announced on Wednesday it had found a 100 carat rough diamond, the third big diamond found by the company in just two months.
The company, which owns the Letšeng mine in the south African country of Lesotho, said it had recovered the white Type IIa diamond - a very rare type which is almost devoid of any impurities - on June 22 this year. Shares in the company were up 6 percent at 120 pence on Wednesday morning.
On May 31, the company announced it had discovered two large diamonds, one of 164 carats, and the other, 103 carat yellow diamond.
The first diamond was sold for $9 million into a partnership arrangement, while the second one was sold at tender for an undisclosed price.
The Letšeng mine has produced four of the world's top 20 diamonds, including the 15th largest, the 603 carat Lesotho Promise which was recovered in August 2006 and sold for $12.4 million. In 2007, the world's 18th largest rough diamond of 494 carats was also discovered there.
Yet, despite the apparently bumper hoard in the Lesotho mine, the London-listed mining company's share price has fallen 42.26 percent over the last twelve months, hurt by weak diamond prices in 2012 against a backdrop of increased production and weakened demand from emerging and developed markets.
Investor sentiment was also not helped by a sharp decline in production at the mine, which fell 38 percent from the preceding quarter. Gem, announced a 61 percent fall in full-year earnings in March, with revenue down to $65.5 million in 2012 from $166.5 million a year earlier.
The company was not alone in suffering a decline in profits, with rough stone prices falling by about 15 percent last year on average, Neil Gregson, the manager of JPMorgan's Natural Resource Fund, told CNBC recently.
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After modernizing infrastructure at the mine, Gem's chief executive Clifford Elphick said production would step up later in the year.
"Mining will steadily increase in the higher value and higher grade Satellite pipe in the second half of this year, and it is anticipated that revenues will therefore show a resulting increase," he said in a statement on the company's website.
The latest diamond find could make for a good second quarter for Gem Diamonds, according to Jon Bergtheil, Citi's metals and mining analyst.
"The recovery of three diamonds each with a likely price-tag in the $6-$10 million range should be viewed against total 2012 revenue of $202 million. The three diamonds alone could come to represent more than 13 percent of 2012 turnover," Citi's Bergtheil said in a note on Wednesday.
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"Rio Tinto recently decided not to sell its diamond assets, arguing that the commodity outlook was positive for the decade ahead. We agree," Bergtheil said.
"The diamonds produced by Gem Diamonds are for the luxury goods market. We are positive on the outlook for diamond prices, particularly for large, high-value stones," he said before warning,"Any change in consumer spending habits and/or further economic deterioration could result in lower demand and lower prices."