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The Carat Comes Before the Stick with this Glittering Diamond Mine

By Malcolm Stacey | Thursday 7 June 2018


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Hello, Share Scatterers. Diamonds are a glamorous play, but oh, how risky! I’ve thrown the odd thousand at a few miners hoping to find a few glittery winners. But I have usually been disappointed. Some of my long-ago picks are now so low in value that they’re not even worth cashing in. But that, as Shareprophets star contributor Wilders recently pointed out, is the dodgy nature of exploratory mining. However, there are a few diamond miners with impressive assets rather than just high hopes.

The aptly-named Gem Diamonds (GEMD) is a case in point. Quality is everything for a girl’s best friend. And Gem produces stones of the very best calibre.

The company owns most of Letseng Mine in the landlocked Southern African kingdom of Lesotho. The local government owns the rest of it. There Gem digs out white diamonds of super-duper colour. These are the most valuable per carat diamonds on the planet. In a recent trading statement, the company announced that seven diamonds of greater than 100 carats had been found in the first quarter of 2018.

These stones included a dream of a diamond which was found to comprise a whopping 910 carats. It was sold a couple of months later for $40 million! That’s enough to make you dig carefully through your own cabbage patch. It may sound like a famous gem in a Sherlock Holmes mystery. And indeed, it is the second largest diamond found in the last 100 years.

Gem also owns another diamondary called the Ghagoo Mine in Botswana. Not quite as enviable to competitors as its other venture, but still a very nice mine to have. And this time it owns 100% of the operation.

So if you like the idea of diamonds, and who doesn’t, you’ll be investing in a proven asset with an experienced management which really knows what it’s doing.

The exact opposite of the boss in the Punter’s Return.


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