July 30, 2012 / 7:11 AM / 5 years ago

Gem Diamonds production rises

July 30 (Reuters) - Gem Diamonds Ltd reported an increase in production for the first half and said it suspended the formal process of exploring options for its Ellendale mine in Australia.

The company said it continued to “explore all options to maximise value” at Ellendale, which produces an estimated 50 percent of the world’s supply of yellow diamonds.

The miner said production at Ellendale grew 51 percent to 78,881 carats in the first half after the commissioning of the primary plant feed section of the processing plant.

Production from its other mine, the Letseng mine in Lesotho, rose 8 percent to 57,116 carats.

Gem Diamonds reiterated its outlook for the diamond market, expecting it to continue to experience short-term volatility.

“Our view on the long-term outlook for the diamond market remains positive, with supply forecast to remain tight and growing demand in key markets expected to put upward pressure on diamond prices,” Chief Executive Clifford Elphick said.

The company’s shares, which have lost about a quarter of their value in the last three months, closed at 193 pence on Friday on the London Stock Exchange.

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