Gem Diamonds sells white diamond for $10.6 mln

(Adds analyst comment, other diamond sales))

By Karen Rebelo

Oct. 1 (Reuters) - London-listed Gem Diamonds Ltd said it had sold a 198-carat white diamond recovered from its Lesotho mine in August for $10.6 million.

2014 has been a bonanza year for diamond miners such as Gem and larger competitor Petra Diamonds Ltd (LSE: PDL.L - news) , with the discovery and sale of several high-value stones lifting profits and cash flows.

"This is a good result for Gem Diamonds, but the value comes in slightly below the recent type II 160 carat diamond which the company sold for $11.1 million in March," analysts at Numis Securities said in a note.

The diamond was sold at Letseng's September tender, the company, which also mines in Botswana, the company said in a statement on Wednesday.

At a tender in February, Gem Diamonds sold a 162.02-carat diamond for $11.1 million and a 161.31-carat stone for $2.4 million. Both diamonds were recovered from Letseng in January.

The Letseng mine, located in the Maluti mountains of Lesotho, is known for its large white diamonds. Since Gem Diamonds acquired a 70 percent stake in 2006, the mine has unearthed four of the 20 largest white gem-quality diamonds ever recorded.

"Diamonds providing some much needed excitement in the mining industry at the moment, a nice counter to miserable gold and iron ore prices at present," Numis said. (Reporting by Karen Rebelo in Bangalore; Editing by Sunil Nair and Louise Heavens)