LSE-listed Gem Diamonds said first-half diamond sales from its South African and Australian mines were lower due to strong currencies, and that it remained cautious about demand in the United States, but its cash position was strong with no debt, Reuters reported.



The diamond mining company said of late, rough diamond prices were firming up in the second quarter.



Gem Diamonds said it had $118 million of cash as of June 30, with no outstanding debt.



Shares in the company rose as much as 8.4% in morning trade on the London Stock Exchange yesterday, according to the report.



"The diamond market experienced further falls in prices of rough diamonds at the beginning of the first half of this year, however in recent months prices first stabilized and then strengthened," Gem Diamonds CEO Elphick said in a statement.



The company said large diamonds from its flagship mine Letseng in Lesotho, in which it holds 70%, remained some of the most sought after, attracting high prices per carat.



The Letseng diamond mine generated first-half sales of $74.1 million, down 18% from the year-ago period.



Ellendale's rough diamond sales for the period fell 48% to $30.8 million.



The Ellendale E9 operations in Australia and the Letseng diamond mine in Lesotho in Africa are the only producing operations after a drop in diamond prices forced the company, and many of its rivals, to put a number of mines on care and maintenance and to mothball future diamond projects, said the report.



Sharply stronger currencies in metals-producing nations are wiping out much of the benefit of higher prices for diamond mining companies, it said.



Since commodities are sold in dollars, a stronger currency where they are mined boosts costs and hurts margins.