Gem Diamonds provides half year trading update

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gem diamonds photoGem Diamonds Limited, the developers of Ghaghoo diamond mine in Botswana has reported its trading update for the half year period 1 January to 30 June 2013 with the company saying it has maintained strong cash position during the period under review.

At its Lesotho operations, the company revealed that it has completed the installation of the four cone crushers in Letšeng’s Plants 1 and 2, which are aimed at reducing diamond damage and completed on time and on budget.

Gem Diamonds said 3 diamonds over 100 carats in size were recovered during the period at Letšeng; including a 164 carat white diamond (which was sold for US$ 9 million into a partnership arrangement); a 103 carat yellow diamond (which sold for US$ 810 000); and a 100 carat white diamond (which sold for US$ 6.45 million in July 2013).

An average value of US$1 741 per carat was achieved for the first 5 tenders of 2013 (US$ 1 690 per carat in H2 2012) at the Lesotho project.

At the Botswana project, Gem Diamonds added at the Ghaghoo diamond mine, the decline tunnel progressed into competent basalt following completion of the sand portion and the open face tunnel shield was successfully removed in early July 2013.

“Construction of the Plant is complete, with commissioning planned to commence in Q2 2014 to coincide with the ore becoming available,” the company revealed.

Gem Diamonds’ CEO, Clifford Elphick said Letšeng continues to demonstrate that it is a high quality mine following the recovery of three diamonds weighing in excess of 100 carats each.

“We are now focused on moving mining operations to the higher value, higher grade satellite pipe, which should positively impact revenues during H2 2013,” Elphick said.

“The secondary and tertiary cone crushers have now been installed and are expected to reduce diamond breakage and we continue to evaluate other low cost initiatives focused on realising additional value from our Letšeng mine through Project Kholo Optimised.”

During the Period the group said it maintained a its strong cash position with US$ 61.5 million cash as at 30 June 2013, of which US$ 54.6 million is attributable to Gem Diamonds.

As at Period end no draw-downs have been made on either of the US$ 20 million or Maloti 250 million (US$ 25 million) facilities and subsequent to the Period end, on 19 July 2013, Kimberley Diamond Company made an early repayment of Au$ 10.5 million to Gem Diamonds for the outstanding portion of the loan which formed part of the sale of the Ellendale mine in January 2013.

Gem Diamonds said its financial results for the period will be detailed in its Half Year 2013 Results Announcement which will be released on 15 August 2013.

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