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Chow Tai Fook Sales Dip on Economic Slowdown

Chow Tai Fook followed a string of major retailers that have noted a slowdown in greater China as the jeweler’s same-store sales fell in the three months that ended December 31.

“A decline in same-store sales was recorded for both mainland China and Hong Kong and Macau markets in the third quarter amid uncertain macroeconomic environment,” the company said in a trading update Monday.

Same-store sales — at locations open for more than a year — dropped 7% year on year in China and 6% in Hong Kong and Macau. Same-store sales of gold products fell 11% in China and by 6% in Hong Kong and Macau, while gem-set jewelry declined 5% and 8%, respectively.

Other retailers have expressed similar caution about the region, with Cartier owner Richemont noting a slowdown in Hong Kong due to lower tourist spending resulting from a weaker yuan versus the Hong Kong dollar. Tech giants Apple and Alibaba also recently expressed concern about a decline in the region.

Hong Kong’s government this month noted that slower retail growth reflected more cautious consumption sentiment stemming from external uncertainties such as the US-China trade tensions and volatility in global financial markets.

Chow Tai Fook saw lower sales volume but slightly better average prices due to a shift toward higher weights in its gold products, which account for approximately 60% of its total retail revenue. The average price of its gem-set jewelry fell 4% to HKD 6,600 ($841) in China and by 3% to HKD 11,500 ($1,466) in Hong Kong and Macau.

The jeweler reported that total retail sales grew 1% in China, boosted by 259 new points of sale that opened in the country during the quarter, while overall sales in other markets slipped 1%.

Source: Diamonds.net

Eurostar Enters Administration as Debts Mount

Eurostar Diamond Traders has entered restructuring proceedings in Belgium, having amassed substantial debts, according to the company’s court-appointed administrator.

The Antwerp-based diamond manufacturer owes more than $500 million to creditors across its global operations, Alain Van den Cloot, one of the administrators, estimated in an email to Rapaport News.

Two Antwerp courts designated Van den Cloot and a second attorney, Nathalie Vermeersch, as provisional administrators for Eurostar’s Belgian business last month. Their role is to help the company protect its assets and pay off its debts.

“The reasons why [Eurostar] suffered those severe losses the last two years are under investigation,” explained Van den Cloot, a lawyer at de Clippele Advocaten. “Receivables should cover some debts, but if that’s still the situation, I can’t assess right now.”

The court documents list the trustees of bankrupt Antwerp-based diamond company Exelco among those that petitioned the court, as Eurostar owed the Exelco estate $600,320 for an unpaid invoice.

However, Eurostar was also the largest trade creditor of Exelco’s US affiliate, as Exelco North America owed it about $6 million, according to that company’s November 2017 Chapter 11 bankruptcy filing.

Eurostar has lost its status as a De Beers sightholder, but is still operating, Van den Cloot added.

Source: Diamonds.net

Angola to host first competitive diamond bid sale

The first competitive bid sale of large and premium quality diamonds from the Lulo diamond mine will take place on January 31, 2019, in the Angolan capital of Luanda.

According to a press release issued by Australia’s Lucapa Diamond, owner of a 40% stake in the prolific mine, the stones for sale will the first diamonds offered in a competitive process under the new diamond marketing policy enacted by President Joao Lourenco and the Angolan Council of Ministers.

The bid is organised in by state owned diamond trading firm SODIAM while the diamonds are being offered by Sociedade Mineira Do Lulo, which holds the alluvial mining licence to the Lulo concession and works in partnership with Lucapa, who has a 35-year license for the project. Empresa Nacional de Diamantes E.P. and Rosas & Petalas, also form part of the partnership.

Seven exceptional Lulo diamonds, including a 46 carat pink and six top colour Type IIa white gems ranging from 114 carats to 43 carats, will be showcased.

“Lulo diamonds have already established a reputation as being among the highest quality gems in the world. Together with our Angolan partners, Lucapa is delighted that SML will now start showcasing these exceptional diamonds to the strong interest shown by the world’s leading diamantaires,” Lucapa Diamond Chief Executive Officer, Stephen Wetherall, said in the media brief.

Lulo, a 3,000 square kilometre concession located in Angola’s diamond rich Lunda Norte region, hosts the world’s highest dollar per carat alluvial diamonds and has produced some of the largest gem-quality rocks in the planet.

Angola is the world’s No.4 diamond producer by value and No.6 by volume.

ALROSA Sells $4.41B Of Rough Diamonds In 2018

ALROSA reported the sale of $323.7 million of rough in December and $4.41 billion for all of 2018.

ALROSA’s December sales of rough and polished diamonds increased by 38% YoY to $328.7, with polished diamond sales of $5 million.

Meanwhile, its total diamond sales in 2018 grew 6% YoY to $4.51 billion, with polished sales of $95.3 million.

“A 6% sales growth in 2018 was driven by both high demand for rough diamonds and positive price dynamics in the first half of the year, market demand was strong in all rough diamond categories, and traditional slowdown in demand in the second quarter due to seasonality was not registered this year,” said Evgeny Agureev, Member of the Management Board, Director of the United Sales Organization at ALROSA.

“In the second half of the year, buying activity in the low-priced product segment significantly deteriorated due to a weakening of the global market situation and both seasonality and destocking at a number of Indian midstream companies. At the same time, the company was actively engaged in optimizing its stocks, which made it possible to increase sales in physical terms, despite a decline in production in 2018 by 8% to 36.6 million carats.

“In December, sales in value terms increased by 20% compared to November 2018 due to a flexible pricing policy against the background of seasonal renewed demand and replenishment of stocks by the companies in the cutting sector, which took advantage of the pricing environment. Despite the cooling of the market in the second half of 2018, we expect that the final customer demand will remain at least stable,” he added.

Source: IDEX

Hong Kong Luxury Sales See Rare Drop

Retail sales of jewelry and other luxury items in Hong Kong declined for the first time in 17 months as global economic uncertainties impacted consumer sentiment.

Revenues from jewelry, watches, clocks and other valuable gifts dropped 3.9% to HKD 5.88 billion ($750.8 million) in November, the municipality’s Census and Statistics Department reported Thursday. Sales in all retail categories increased 1.4%, but growth was the slowest in more than 12 months.

“The generally moderated growth in retail sales in recent months reflected more cautious consumption sentiment in the face of various external uncertainties such as the US-mainland trade tensions, and volatilities in the global financial markets,” a government spokesperson said.

Hong Kong-based jewelers Chow Tai Fook and Luk Fook raised concerns in November about the impact of the US-China tariff war and the depreciation of the Chinese yuan on the region’s consumer demand. While proceeds from jewelry and other luxury products jumped 16% to HKD 77.06 billion ($9.84 billion) for the first 11 months of 2018, growth slowed in September and October, according to government figures. The November decline matches Luk Fook’s warning that its same-store sales had dropped in late October and November.

Retail sentiment could suffer further due to a drop in the value of assets consumers own, as well as uncertainty in the global economy, the government added. A positive job market and growth in Hong Kong’s tourist industry — a major source of retail spending in the municipality — should partly support the sector, the spokesperson continued.

Monthly sales of jewelry and other luxury products in the municipality last fell in June 2017, when the market was recovering from a slump in tourism in 2015 and 2016.

Source: Diamonds.net

GEM DIAMONDS WRAPS 2018 WITH A 125-CARAT DIAMOND AT LETSENG

Gem Diamonds has announced the recovery of a 125 carat high quality white, Type IIa diamond. The diamond was recovered on December 20 from the Letšeng mine in Lesotho; it is the 15th diamond greater than 100 carats to be recovered in 2018.

On December 19, the miner announced the recovery of two high quality, white Type IIa diamonds from Letšeng: a 101 carat stone and a 71 carat stone, both recovered within a 24-hour period at Letšeng.

Back in November, Gem Daimonds published its production and sales performance report for Q3 (July 1 to September 30, 2018), showing a rise of 27% in diamond production at Letšeng totaling 35,755 carats. Revenue for the period totaled $21 million, including the sale of eight diamonds for more than $1 million each.

Source: israelidiamond.co.il

Lesedi La Rona May Once Have Been 2,774ct.

The second-largest diamond in history was probably twice as big before it broke into pieces, researchers at the Gemological Institute of America (GIA) have claimed.

Similarities between the 1,109-carat Lesedi La Rona, the 812-carat Constellation and three other stones suggest they were all one large piece of rough weighing at least 2,774 carats before volcanic eruptions or mining processes split them up, the GIA said this week.

Lucara Diamond Corp., which discovered all five diamonds at its Karowe mine in Botswana in November 2015, had already claimed that one of them, a 374-carat stone, was once attached to the Lesedi La Rona. The GIA last year studied three of the other stones — the Constellation, as well as diamonds weighing 296 carats and 183 carats — and speculated that they were also from the same rough.

The theory was strengthened after the GIA gained access to faceted diamonds from the Lesedi La Rona and the 374-carat stone earlier this year, Dr. Ulrika D’Haenens-Johansson, a senior research scientist at the GIA, told Rapaport News Wednesday.

The five diamonds had similar visual characteristics in their rough form, and came from the same part of the Karowe mine at the same time. They also gave results under close gemological analysis that were so similar that it’s unlikely they were unrelated, Dr. D’Haenens-Johansson said. The nature of some of the stones’ surfaces also suggested they had become detached from each other.

“After the 2017 study, all we could do was speculate that all five stones were from the same rough,” she added. “After having the opportunity to examine all five stones in 2018, we are able to reach stronger conclusions. It is probable that there are other unaccounted pieces that would have been part of this historic rough.”

Lucara CEO Eira Thomas said the company had no reason to disagree with the GIA’s findings. Evidence indicates the larger stone broke up both because of natural effects and being knocked around during the recovery process, Thomas noted.

The company used X-ray transmission (XRT) technology to help it recover the five large diamonds. It has since installed additional XRT equipment at Karowe to ensure it unearths exceptional stones as early as possible in the process.

D’Haenens-Johansson presented the findings at the GIA’s International Gemological Symposium in Carlsbad, California, in October, and published a summary in the Fall 2018 issue of Gems & Gemology, the institute’s quarterly journal. The institute is preparing a full, peer-reviewed article in a forthcoming edition of the publication.

Lucara sold the 374-carat diamond to Graff for $17.5 million in May 2017, and subsequently sold the Lesedi La Rona to the same company for $53 million in September of that year. Graff recently unveiled several polished diamonds it had cut from the 1,109-carat rough.

The Constellation went for $63.1 million in 2016 to a partnership comprising Dubai-based Nemesis International and Swiss jeweler De Grisogono.

Image: The Lesedi La Rona. (Donald Bowers/Getty Images/Sotheby’s).

Source: Diamonds.net

Gem Diamonds Unearths 101ct. and 71ct. Diamonds

Gem Diamonds 101 Carat and 71 Carat Rough Diamonds

Gem Diamonds has recovered two large diamonds within a 24-hour period at its Letšeng mine in Lesotho, the company said Wednesday.

The high-quality stones are white, type IIa diamonds weighing 101 carats and 71 carats, it added.

The 101-carat stone is the 14th diamond over 100 carats the miner has found this year, a record for the company. Last year, Gem Diamonds unearthed eight stones of that size.

The largest diamond the miner has found is the 910-carat Lesotho Legend, which it claims is the fifth-largest in history. It discovered the stone in January, and sold it in March for $40 million, or $43,912 per carat.

Image: The 101-carat and 71-carat diamonds. (Gem Diamonds)

Source: Diamonds.net

Low Prices Trigger A Four-Way Merger Proposal For African Diamond Miners

Tough times in some parts of the diamond-mining industry has prompted an innovative solution, a four-way merger to create a new southern African diamond specialist.

The proposal, from the London office of the German bank, Berenberg, could see Gem Diamonds, Petra Diamonds, Lucara Diamond Corporation and Firestone Diamonds emerge as a single business with enhanced financial metrics courtesy of cost savings and a focus on big, high-quality gems.

If the deal happens, and at this stage it is just a proposal from Berenberg and not something the diamond-miners have embraced, the new business would have mines in South Africa, Botswana, Tanzania and Lesotho.

3% By Volume, 8% by Value

Collective diamond production would total five million carats a year, which is equivalent to 3% of global output, but more importantly the proposed business would account for 8% of diamond supply by value.

The difference between volume and value is the key to Berenberg’s plan which has been published at a time when miners of small and low-grade diamonds are battling a flooded market whereas companies able to supply high-quality gems are generating strong profits.

An uncut 25 carat diamond mined in Botswana.

Values At Trough Levels

Berenberg said in a research report titled “Consolidating African diamond mining” that current valuations of diamond mining companies were at trough levels with lacklustre enthusiasm for the sector.

“We think something new is needed to return this sector to its former glory,” Berenberg said.

The bank said the logical way to start the process would be for a transaction between Lucara and Gem, which would create the go-to business for large diamonds, followed by a transaction with Petra and then with Firestone rolled into the structure.

Each company has its own production profile but Lucara is the best known for big diamonds having given the world the monster Lesedi La Rona in 2015, an 1109 carat stone which sold for $53 million and has since been cut into 67 smaller gems by Graf Diamonds.

Strong Cash Flow

According to Berenberg’s multi-stage merger proposal the new business would emerge with annual revenue of around $1.1 billion and free cash flow of $200 million.

The merged business would overcome problems which hurt investor interest in smaller diamond miners including low stock-market value, high debt levels, project risk, limited growth options and a lack of return to shareholders.

“Our $1.3 billion market capitalization business would have listings in Canada, London and Sweden and, through the ability to pay an attractive dividend (we calculate a possible yield of 7%-to-8%) and the potential to attract investment from a range of global investors,” Berenberg said.

Source: Forbes

552 Carat Yellow Diamond Is The Largest Ever Found In Canada

Finding exceptionally large diamonds is rare. Finding extra large diamonds in fancy colors is even more rare. As such, the announcement by Dominion Diamond Mines that it has unearthed the largest known diamond ever found in North America is big news. Found in October at the Diavik Diamond Mine in Calgary, Canada, the Canadamark yellow diamond weighs in at 552 carats and beats the previous record (held by the Diavik Foxfire diamond) of 187.7 carats that was also found at the same mine.

Dominion Diamond Mines ULC sources responsibly mined diamonds and owns 40 percent of Diavik. The Diavik Diamond Mine is just shy of 150 miles south of the Arctic Circle in the Northwest Territories of Canada, and has produced several important stones in the past. This newest discovery measures about 1-1/2 inches in diameter and more than 2 inches in height. The color and texture are unique geologically speaking, as such a large and rare yellow diamond doesn’t usually form in the region. According to Dominion Diamond Mines’ release, “Abrasion markings on the stone’s surface attest to the difficult journey it underwent during recovery, and the fact that it remains intact is remarkable.”

The Canadamark(TM) program by Dominion Diamond Mines ensures that all diamonds bearing its logo are rigorously tracked from mine to polished gem in order to offer final consumers full transparency of the supply chain. Once the rough is cut, the diamonds will be certified as Canadamark(TM).

In the case of the previously found Diavik Foxfire diamonds, rather than sell it in the rough, the stone was cut and polished — yielding a 37.87-carat brilliant-cut pear shaped diamond and a 36.80 carat brilliant-cut pear shape. Both of these stones sold recently at a Christie’s auction for $1.3 million. It is expected that Dominion Diamond Mines will take the same approach with the 552-carat Canadamark(TM) yellow diamond. The yield could be several larger sized diamonds that Foxfire, or could be similar sizes but more of them. It is impossible to know, as a rough diamond must be carefully studied before being cut to determine the perfect size and shape of the finished, polished stones that will show off their most beautiful color and brilliance.

Certain other fancy yellow diamonds have made history. In fact, among the world’s largest yellow diamonds is the 439.86 carat light-yellow diamond that was found by DeBeers in 1888 and later cut into a 234.65-carat cushion-cut stone. The Tiffany Yellow Diamond is also one of the largest ever discovered. It weighted 287.42 carats in the rough when it was found in 1878 in the Kimberly Mine in South Africa. It was eventually cut in to the 128.54-carat cushion known a the Tiffany Yellow Diamond.

According to a release issued by Dominion Diamond Mines, Kyle Washington, Chairman, says “This incredible discovery showcases what is truly spectacular about Canadamark diamonds. “The color and texture of the diamond are a unique example of the journey that natural diamonds take from their formation until we unearth them. Our Diavik Mine has produced some of the most beautiful diamonds in the world, and this one certainly tops the list.”

Souce: Forbes