Operating losses at Dublin-based exploration firm Botswana Diamonds increased by almost 5 per cent last year, but the company believes diamond jewellery is to become a "must have" item due to the growth of the middle classes.
In its preliminary results for the year ended June 30th, 2017, the John Teeling-chaired company said operating losses grew to £310,898 from £296,404 during the previous year.
Total comprehensive losses for the year however shrunk to £161,868, down from £199,846 the year before. The company’s total assets meanwhile grew to £7,934,316, up from £7,221,848 in 2016.
“As the natural resources exploration sector shows signs of life, we are well positioned to take advantage of emerging investor interest,” said the company.
“The past nine years have been difficult for directors of stock exchange listed explorers. There has been virtually no new money available. Survival was the task so exploration spending declined. Not all survived.
“Companies have disappeared while many more languish at minuscule valuations often at prices less than 5 per cent of their highs. What funding was available was generally from directors, their families and friends.”
‘Significant improvement’
However, the company said there had been “a significant improvement” in recent times.
“A long bull market on the stock exchange has given investors renewed confidence,” it said. “The commodity cycle has turned upwards with prices of many metals showing significant rises.
“New opportunities have also arisen. Prospective ground which was held by mining companies is now available as the companies are unable to pay the ongoing costs and/or spend money on exploration.
“The market for diamond jewellery continues to grow. As hundreds of millions around the world enter the middle classes, diamond jewellery becomes a must-have item.”
The firm added that supply is “currently sluggish” and set to decline.
“There are few new mines while existing mines get more expensive to operate or simply run out of diamonds,” it said. “The collapse of the structures put in place by De Beers to control prices has led to more volatility, yet over a 20 year period prices have grown more than inflation.”
