Gem Diamonds releases Interim Management Statement for Q1

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GhagooGem Diamonds Limited says work at its Botswana project has progressed to the point where the country rock has been reached which will allow for better rates of progress using conventional drill and blast methods going forward.

The company’s Interim Management Statement (IMS) for the Period 1 January to 23 April 2012 also reveals that construction of the plant at Ghaghoo is 90% complete. “No further work will be undertaken until commissioning commences in Q2 2014 to coincide with the ore becoming available.”

Ghaghoo has been delayed by strong sand overburden in the tough terrains of the Central Kalahari Game Reserve, where the company is developing an underground mine. Ghaghoo and Letšeng in Lesotho are the key projects in Gem Diamonds group. At Letšeng, the company says preparatory work to install four secondary crushers in both Plants 1 and 2 to reduce diamond breakage is complete.

In the period under review, a total of 158 rough diamonds greater than 10.8 carats in size were recovered and an average value of US$1 599 per carat was achieved for the first 3 tenders of 2013.

Gem Diamonds’ CEO, Clifford Elphick says the quarter was in line with our reduced expectations for grade and quality as expected. “Throughput was relatively low, albeit planned. Rough diamond prices have improved over the quarter, but this is not reflected in our results because of the lower quality diamonds mined so far this year,” he says.

Elphick adds that as communicated previously, mining at Letšeng this year has been restricted to the lower grade and lower value section of the Main pipe. He says mining will return to the higher value satellite pipe at the end of Q2 this year. It is anticipated that this will result in improved revenues for the remainder of 2013.

“Work at the Ghaghoo project has progressed to the point where the country rock has been reached which will allow for better rates of progress using conventional drill and blast methods.”

The group also reported there was only one Lost Time Injury (LTI) occurred while there is no major stakeholder and environmental incidents have occurred year to date. Gem Diamonds Limited has US$56.0 million cash as at 31 March 2013, of which US$52.8 million is attributable to Gem Diamonds. To date no draw-downs have been made on either of the US$20 million or Maloti 250 million (US$27 million) facilities.

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