Despite good Christmas sales in the important U.S market, weakness in rough and polished prices towards the end of fiscal 2015, primarily caused by a tightening of available bank financing to the cutting and polishing industry, has resulted in lower rough diamond sales than the Company had previously expected during the period.
The medium-term supply and demand fundamentals for diamonds remain positive.
Three rough diamond sales (in November, December and January) were held during the quarter which has resulted in a decrease in the diamonds held in inventory at the end of the period. The Company plans to hold two rough diamond sales in the first fiscal quarter of 2016.
At January 31, 2015, the Company had rough diamond inventory with an estimated market value of approximately $270 million. ($165 million work in progress, $20 million samples and $85 million of rough diamonds available for sale.)