Market report: Gem Diamonds loses sparkle – as snow falls in Africa

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African workers probably aren’t as used to taking snow days as Londoners.

But miners at Gem Diamonds’ Letšeng mine in hilly Lesotho have been unable to work in recent days, having battled Arctic conditions as heavy snowfall and high winds limited access to the mine.

Today, the miner’s shares were off 4.26p at 124.24p after it said there had been damage to overhead power lines, and stand-by generators had been installed.

It added that plants were operating at a reduced rate but it expects the power supply to be fully restored “in the short term”.

The company warned it may need to “reassess” full-year guidance for the number of tonnes of ore treated and operating costs, but was adamant that the number of carats mined this year would remain unchanged.

Elsewhere in the diamond-mining sector, shareholders of larger peer Petra Diamonds were sitting more comfortably as it revealed the discovery of a 138.57-carat white diamond at its Cullinan mine in South Africa, helping the shares up 1.5p to 119.25p.

The FTSE 100’s steady rise since last week’s interest rate cut stalled, with the blue-chip index marginally down 0.73 points to 6850.57.

Insurers were on the winning side, with Legal & General recovering from yesterday’s results-induced fall with a 5p rise to 211p.

Shares in RBS were off 0.8p at 191.5p as Investec banking guru Ian Gordon told clients it was “time to give up waiting” on the turnaround, and reduced his rating from Buy to Hold.

Reviews of Cobham’s results weren’t particularly glowing either as Exane BNP Paribas downgraded to Underperform, casting doubts about the aerospace and defence firm’s touted recovery this year. Its shares fell 3.6p to 158.2p.

Support services group Interserve surged 47p, or 15%, to 367p as its first-half figures beat analysts’ forecasts with revenues up 2.4% to £1.63 billion.

“Although the outlook for the [Middle East] region is relatively uncertain, Interserve’s first-half cashflow performance has been excellent,” said analysts at JPMorgan.

Investors were feeling less secure about their investment in cyber defence firm NCC following the news chief financial officer Atul Patel is leaving without a replacement in the pipeline.

The shares, which hit an all-time high yesterday, slumped 33.1p, or 9.6%, to 311.7p.

AIM punters ploughed into Harvest Minerals, which soared 1.25p, or 20%, to 7.5p after a scoping study of its Brazilian fertiliser project encouraged the market. First production is earmarked for later this year.

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August 10, 2016 |
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